Service Tax on Renting of immovable property is Constitutional: Allahabad HC

3. In all the writ petitions vires of Sections 75(A)(6)(h) and 77 of Finance Act, 2010 and Sections 65(90)(a) and 65(105)(zzzz) read with Section 66 of Finance Act, 1994 as amended by Finance Act, 2007 and Finance Act, 2010, has been challenged as being illegal, arbitrary and lacking legislative competence infringing Articles 14, 246 and 265 of Constitution of India.

4. Petitioners have also challenged consequential circular dated 04.01.2008 and 22.05.2007, as void, nullity, illegal and ultra vires of provisions of Finance Act, 1994 as amended by Finance Act, 2007, Finance Act, 2008 and Finance Act, 2010.

5 .For convenience prayers made in Writ Petition no 1827 (MB) of 2011 which are common in all writ petitions are quoted as under:-

“(i) issue a suitable writ, order or direction be issued declaring that Section 75(A) (6) (h) and Section 77 of Finance Act, 2010 as null and void and ultravires to the Constitution of India and/or pleased to strike down the said provisions being illegal arbitrary and violative of Article 14, 246 and 265 of the Constitution of India.

(ii) issue a suitable writ order or direction be issued declaring Section 65(90) (a) and Section 65(105) (zzzz) read with Section 66 of the said Finance Act, 1994 as amended by Finance Act, 2007 and Finance Act, 2010 as null and void and ultravires the Constitution of India and/or pleased to strike down the said provisions being illegal arbitrary and violative of Article 14, 246 and 265 of the Constitution of India.

(iii) issue a suitable writ, order or direction be issued declaring that Article 246 read with Entry 97 of List I of the VII Schedule to the Constitution of India does not confer legislative power on the Union to enact Section 65(90) (a) read with Section 65(105) (zzzz) of the Finance Act, 1994 as amended by the Finance Act, 2007 and Finance Act, 2010.

(iv) issue a writ of prohibition, or a writ in the nature of prohibition, or any other appropriate writ, order or direction under Article 226 of the Constitution of India, prohibiting the opposite parties by their servants, agents and subordinates from,

a. directly or indirectly giving effect to the impugned provisions viz. Section 65(90) (a) read with section 65(105) (zzzz) of the Finance Act, 1994 as amended by the Finance Act, 2007 and Finance Act, 2010 and Levying or attempting to levy, collect or recover from the petitioner any service tax under the said impugned provision of the said Act.

(v) issue a writ or mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction under Article 226 of the Constitution of India.

a. Restraining the opposite parties by their servants, agents and subordinates from,

(1) directly or indirectly giving effect to the impugned provisions viz. Section 65(90a) read with Section 65(105) (zzzz) of the Finance Act, 1994 as amended by the Finance Act, 2007 and Finance Act, 2010 and

(2) Levying or attempting to levy collect or recover from the petitioner any service tax under the said impugned provision of the said Act.

(vi) issue a writ, order or direction in the nature of certiorari quashing the Circular No. 98/1/2008­ST dated 4.1.2008 and Notification No. 24/2007 dated 22nd May, 2007 as revived by the Finance Act, 2010 issued by the opposite party no. 1 as illegal, null and void and ultravires the provisions of Finance Act, 1994 as amended by Finance Act, 2007, Finance Act, 2008 and Finance Act, 2010.”

6. Petitioner, M/s N.K. Bhasin, sole petitioner in Writ Petition no. 1827 (MB) of 2011 is a Limited Company incorporated under Act, 1956. It is also in similar lease agreement of immovable properties and has challenged service tax which is now payable under provisions detailed above, by it.