The Hindus’ marriage ceremony is not a religious but a social function and various kinds of service providers, including those erecting tents for it, are not exempted from paying service tax, the Delhi High Court ruled today. A bench of Chief Justice Dipak Misra and Justice Sanjiv Khanna gave this ruling dismissing a plea by All India Tent Dealers’ Welfare Organisation, contending they should be exempt from paying service tax for erecting tent for holding the marriage ceremony as it is primarily a religious function.
The tent service providers had contended “that no service tax can be levied on the erection of pandal or shamiana for a Hindu marriage is fundamentally a sacrosanct and sacred religious function and can never be treated as a social function to invite the levy of service tax.”
But the court dismissed the contention as held as follows:-
“If the entire provision is properly understood, it is clearly discernible that Hindu marriage is not treated or regarded a social function per se. If the dictionary clause is appositely appreciated, there can be no trace of doubt that only when a “pandal or shamiana” is used for marriage, it earns the status of “social function” because the service component is involved. It is worth noting, the statute itself postulates that marriage is to be regarded as a social function and full effect has to be given to the same. That apart, the pre-requisite is the use of “pandal or shamiana” and, therefore, the contention raised by the learned counsel that Hindu marriage is not a contract but a sacred institution and hence, no service tax is imposable treating it as a social function has to be repelled and we so do.
We do not perceive any merit in this writ petition and, accordingly, the same stands dismissed,”
The tent service providers had come to the court seeking exemption from paying service tax as per provisions of the Section 135(A)(10), 2007 of the Finance Act, which permits imposition of service tax on service providers to organise social functions but not the religious function.
IN THE HIGH COURT OF DELHI AT NEW DELHI
WRIT PETITION (CIVIL) No. 12345/2009
All India Tent Dealers Welfare Organization versus Union of India and Ors.
Judgment reserved on: 26th September, 2011
Judgment pronounced on: 30th September, 2011
DIPAK MISRA, CJ
Invoking the jurisdiction of this Court under Article 226 of the Constitution of India, the petitioner has prayed for the following reliefs: –
“(a) Issue a writ, order or direction in the nature of certiorari that Section 135(A)(10) of the Finance Act, 2007 be quashed as unconstitutional.
(b) Issue a writ, order or direction in the nature of certiorari that erection of a Pandal/Shamiana for marriage is in furtherance of religious ceremonies, rites and rituals which are to be performed for the religious function and should not be considered as social function for the purpose of service tax.
(c) Issue a writ, order or direction in the nature of certiorari that no Service Tax be levied on erection of Pandal/Shamiana for Hindu marriage as it is providing the said activities/services to a religious function and by quashing the said amendments as unconstitutional.
(d) Issue a writ, order or direction in the nature of certiorari restraining the respondents from levying and/or collecting any service tax on erection of pandal or shamiana for a Hindu marriage.
(e) Pass such other and further order(s) as this Hon’ble Court may deem fit and proper in the circumstances of the present case.”
2. We have heard Mr.Joydip Bhattacharya, learned counsel for the petitioner, and Mr.Mukesh Anand, learned counsel for the respondents.
3. Be it noted, the Full Bench of this Court in WP (C) No. 3398/2010, while dealing with the validity of imposition of service tax under Section 65(105)(zzzz) and Section 66 of the Finance Act, 1995 and as amended by the Finance Act, 2010, has held thus –
“74. Quite apart from the above, as we have overruled the first Home Solution case, we are disposed to think that the provisions would operate from 2007 and the amendment brought by the Parliament is by way of ex abundanti cautela.
75. In view of the aforesaid analysis, we proceed to enumerate our conclusions in seriatim as follows:
(a) The provisions, namely, Section 65(105)(zzzz) and Section 66 of the Finance Act, 1994 and as amended by the Finance Act, 2010, are intra vires the Constitution of India.
(b) The decision rendered in the first Home Solution case does not lay down the correct law as we have held that there is value addition when the premises is let out for use in the course of or furtherance of business or commerce and it is, accordingly overruled.
(c) The challenge to the amendment giving it retrospective effect is unsustainable and, accordingly, the same stands repelled and the retrospective amendment is declared as constitutionally valid.”
4. The learned counsel for the petitioner, while not disputing the conception of imposition of service tax, has raised a singular contention that no service tax can be levied on the erection of “pandal or shaman”, for a Hindu marriage is fundamentally a sacrosanct and sacred religious function and can never be treated as a social function to invite the levy of service tax.
5. In this context, we may refer with profit to Section 65(77a) and (77b), which read as follows: –
“(77a) “pandal or shamiana” means a place specially prepared or arranged for organising an official, social or business function;
Explanation: For the purposes of this clause, “social function” includes marriage.
(77b) “pandal or shamiana contractor” means a person engaged in providing any service, either directly or indirectly, in connection with the preparation, arrangement, erection or decoration of a pandal or shamiana and includes the supply of furniture, fixtures, lights and lighting fittings, floor coverings and other articles for use therein.”
6. It is worth noting that the Legislature, by the Finance Act, 2007, has inserted an explanation to Section 65(77a).
7. If the entire provision is properly understood, it is clearly discernible that Hindu marriage is not treated or regarded a social function per se. If the dictionary clause is appositely appreciated, there can be no trace of doubt that only when a “pandal or shamiana” is used for marriage, it earns the status of “social function” because the service component is involved. It is worth noting, the statute itself postulates that marriage is to be regarded as a social function and full effect has to be given to the same. That apart, the pre-requisite is the use of “pandal or shamiana” and, therefore, the contention raised by the learned counsel that Hindu marriage is not a contract but a sacred institution and hence, no service tax is imposable treating it as a social function has to be repelled and we so do.
7. In view of the aforesaid analysis, we do not perceive any merit in this writ petition and, accordingly, the same stands dismissed without any order as to costs.
SEPTEMBER 30, 2011
CHIEF JUSTICE
SANJIV KHANNA, J.
