| Case ID |
1f2df4a6-ce91-421e-aedc-566d9056635c |
| Body |
View case body. Login to View |
| Case Number |
W.P. No. 8539 of 2000 |
| Decision Date |
Jan 01, 2002 |
| Hearing Date |
Jan 01, 2000 |
| Decision |
The Madras High Court held that the provisions of the Finance (No. 2) Act, 1998 are constitutionally valid. The court concluded that the service tax imposed on architects and chartered accountants is distinct from a tax on profession. The legislation's thrust is on the services provided by these professionals rather than on the profession itself. The court emphasized that while professional tax relates to the privilege of practicing a profession, service tax pertains to the actual services rendered. This distinction means that the Parliament has the authority to legislate on service tax under Entry 97 of the Union List, as it does not infringe upon the State's legislative competence concerning professional taxes under Entry 60 of the State List. The court dismissed all petitions challenging the tax, reinforcing the constitutional validity of the service tax provisions. |
| Summary |
In the landmark case between the Indian Institute of Architects and the Union of India, the Madras High Court addressed the constitutional validity of the service tax imposed by the Finance (No. 2) Act, 1998. The petitioners, representing architects and chartered accountants, contended that the service tax was essentially a tax on their profession, thereby falling under the jurisdiction of State List Entry 60. However, the court ruled that the service tax is distinct from a tax on profession, which is linked to the privilege of practicing a profession. It emphasized that the service tax is levied on the services provided by professionals, not the profession itself. The court's decision reinforces the Parliament's power to legislate on service taxes, clarifying the distinction between professional tax and service tax. This ruling is pivotal for professionals in India as it delineates the scope of taxation within the legal framework, ensuring clarity in the duties owed by professionals under the law. |
| Court |
Madras High Court
|
| Entities Involved |
Union of India,
Indian Institute of Architects
|
| Judges |
V.S. Sirpurkar,
A. Kulasekaran
|
| Lawyers |
Arvind P. Datar,
N. Dhanasekaran,
Mohan Parasaran,
N. Inbaragam,
Meenakshisundaram,
B.R. Ramesh Babu,
T. Susindran,
M. Chandrasekaran,
Veeraraghavan
|
| Petitioners |
Indian Institute of Architects,
Various representative bodies of chartered accountants
|
| Respondents |
Union of India
|
| Citations |
2002 SLD 2829 = (2002) 258 ITR 209
|
| Other Citations |
Laghu Udyog Bharati v. Union of India [1999] 115 STC 616,
Western India Theatres Ltd. v. Cantonment Board AIR 1959 SC 582,
Kamta Prasad Aggarwal v. Executive Officer AIR 1974 SC 685,
Federation of Hotel & Restaurant Association of India v. Union of India [1989] 178 ITR 97,
Chartered Accountants' Association v. Union of India [2001] 252 ITR 53,
All India Federation of Tax Practitioners v. Union of India [2002] 256 ITR 401
|
| Laws Involved |
Finance (No. 2) Act, 1998
|
| Sections |
116
|