Judgment

Ruma Pal, J.—These writ petitions have been filed challenging the constitutional validity of Sections 116 and 117 of the Finance Act 2000 and Section 158 of the Finance Act, 2003 by which the decision of this Court in Laghu Udyog Bharati & Anr. Vs. Union of India & Ors. (1999) 6 SCC 418, striking down Rules 2(1)(d), (xii) and (xvii) of the Service Tax Rules, 1994 (as amended in 1997) was sought to be overcome.

2. The writ petitioners are the customers or clients of goods transport operators and forwarding and clearing agents. There are three main grounds on which they have based their challenge. They contend that the basis of the decision rendered in Laghu Udyog Bharati had not been removed or displaced by the impugned sections and could not therefore overrule, replace or override this Court’s decision. The second ground of challenge is that Parliament was legislatively incompetent to enact the law. It is stated that the imposition of the impugned levy encroaches upon the State Government’s power as defined in Entry 56 of List II of the Seventh Schedule to the Constitution which pertains to ‘Taxes on goods and passengers covered by road or on inland waterways’. The submissio