V.S. SIRPURKAR, J. - (1.) THIS judgment shall dispose of W.P. No. 1617 of 1998, etc. since all the writ petitions involve a common question regarding the "constitutional validity" of the 'service tax" levied on the "taxable service" provided to a client by a "mandap-keeper" in relation to the use of a "mandap" for social, official or business functions and also the other allied services.
(2.) PETITIONERS herein are the owners of the premises which are rented out for holding various functions like marriage, business conference, etc. In all these writ petitions, the constitutional validity of Sec. 88 of the Amendment Act 32 of 1994 and Section 116 of the Amendment Act 32 of 1994 is being challenged. By Finance Act, 1994, the 'service sector" was brought under the tax- net for the first time. The said Act was amended from time to time to include the various services which were brought under tax-net. Under the scheme of the Act, the impost of the tax was against the persons who provided the services and they had collect and pay the same. Thus, this tax could be legitimately passed on to the customers and more particularly to the persons whom the services were being offered. The 'services" offered by the "mandap-keepers" were included for the first time by Chapter VI of the Finance Act, 1997. Some of the relevant provisions in that Chapter are as follows : "65(19) mandap means any immovable property as defined in section 3 of the Transfer of Property Act, 1882 (4 of 1882) and includes any furniture, fixtures, light fittings and floor coverings therein let out for consideration for organising any official, social or business function. 65(2) mandap-keeper means a person who allows temporary occupation of a mandap for consideration for organising any official, social or business function. 65(41)(p) taxable service means any service provided to a client, by a mandap-keeper in relation to the use of a mandap in any manner including the facilities provided to the client in relation to such use and also the services, if any, rendered as a caterer." Section 65 underwent a change and by Finance Act 2 of 1998, which became effective from 16-10-1998, Sec. 65(19) was renumbered as Sec. 65(22) while Sec. 65(20) was renumbered as Sec. 65(23). So also, the section relating to "taxable service" was renumbered as Sec. 65(48)(m). The numbers alone changed under the amended Act but the language of the provisions remained the same. It will be better to see Sec. 66(3), which provides that from 16th July, 1997, there shall be levied a tax at the rate of five per cent of the value of taxable services referred to in Sub-clause (1) of clause (48) of section 65. The valuation of taxable services for charging service tax is provided in Sec. 67. The relevant portion is as tinder: "67. Valuation of taxable services for charging service tax. - For the purposes of this Chapter, the value of taxable services, (i) in relation to service provided by a mandap-keeper to a client, shall be the gross amount charged by such keeper from the client for the use of mandap including the facilities provided to the client in relation to such use and also the charges for catering, if any." These provisions are challenged by the petitioners on various grounds.
(3.) THE leading arguments were addressed by Mr. Venkatachalapathy, learned Senior Counsel and Mr. Mohan Parasaran, learned Counsel and their arguments were adopted by the other learned Counsel. For the sake of convenience, we will take the facts in W.P. No. 1617 of 1998, which writ petition is filed by Tamil Nadu Kalyana Mandapam Owners' Association, represented by its President Muktha V. Srinivasan. This is an association, registered under the Societies Registration Act and is an association of about 310 members who are all kalyana mandap owners. The word "kalyana mandap" means "marriage hall". It is a common case that the members of the petitioner association rent out their premises owned or possessed by them for holding ceremonies like marriage, etc or other social, official or business functions. After the aforementioned provisions were produced providing for levying the tax"on the 'services" provided by the mandap-keepers, two representations came to be made by the letters dated 29-3-1997 and 9-6-1997, respectively. In the first representation, it was pointed out that the tax would be "onerous" and the customers would not be ready to pay the tax. By the second representation, it was pointed out that the tax could not be remitted immediately after every marriage or function when the mandap was rented out and, therefore, reasonable time should be granted from the date of rendering the services to make the payment of tax. ;