2011 Supreme(Bom) 924
D.Y.CHANDRACHUD, ANOOP V.MOHTA
Retailers Association of India (RAI) – Appellant
Versus
Union of India – Respondent
Advocates appeared:
For the Appearing Parties:Mr.Aspi Chinoy, Senior Advocate with Mr. Vineet Naik, Mr. Ameet Naik, Mr.Vatsal Shah, Mr.Lavin, C.Hirani and Mr. Vaibhav M. Bhure i/b. Naik Naik & Company Mr. D.J. Khambata, Additional Solicitor General, with Mr. Arif Doctor, Mr. Aashish Agarwal, Mr. Gautam Ankhad, Mr.Aditya Mehta, Mr.Rohan Cama, Ms. Naira Variava, Mr. Vikram Deshmukh, Mr. Afroz Shah i/b. Mr.Pardeshi for Union of India in all matters. Mr. Suresh S.Pakale for the Director General of Service Tax & Central Excise Department in all matters. Mr. R.V. Desai, Senior Advocate with Mr. R.B. Pardeshi for the Commissioner of Service Tax in all matter. Ms. Faiza Dhanani i/b. Dhruve Liladhar & Co. Mr.Vijay A. Sonpal, A Panel Counsel for the State of Maharashtra Mr. J.J. Bhatt, Senior Advocate with Mr. Ameet B. Naik, Mr. Vatsal Shah, Mr.Lavin Hirani and Mr. Vaibhav M.Bhure i/b. Naik Naik & Co. Mr. Navroz Seervai, Senior Advocate with Mr.Ajay Fernandes and Mr. Ranjit Raghunath i/b. Malvi Ranchhoddas & Co. Mr.Janak Dwarkadas, Senior Advocate with Ms. Hemlata Jain, Mr. Zal Andhyarujina, Mr.Kunal Vajani, Mr. Ankit Virmani i/b. M/s.Wadia Ghandy & Co. Mr. Sharan Jagtiani with Mr. Kunal Vajani,Mr. Ankit Virmani i/b. Wadia Ghandy & Co. Mr. V. Sridharan with Mr. Prakash Shah, Mr. Bharat Raichandani i/b.PDS Legal Mr. Vikram Nankani with Mr. Sushanth Murthy, Mr. Nitya Bagaria and Mr.Monish Panda i/b. Mr.M.R.Baya. Mr. Cyrus Bharucha with Mr.Bruno Castellino i/b.M.Mulla Associates Mr.Hiren Mehta Mr.Jitendra Jain with Mr.Suresh Kumar Mr.Jaydeep Deo with Mr.Parag Vyas for the Petitioner Mr.Prakash Shah with Mr.Mihir Deshmukh i/b.PDS Mr.Nivit Srivastava Mr.Devesh Juvekar with Mr.H.K.Sudhakara i/b. Khaitan & Co. Mr.M.I.Sethna, Senior Advocate with Mr.Jitendra B.Mishra Mr.Haribhau Deshinge i/b.Mr.Nitin Jamdar Mr.Chirag Balsara with Ms.Kirtida Chandarana and Mr.Nikhil Pai i/b. Mahernosh Humranwala for Mr.Bhavik Manek i/b. Wadia Ghandhy & Co. Mr.P.Kumar Jain i/b. Prakash Punjabi & Co.. Mr.Mandar M.Goswami Mr.R.Ashokan with Mr.S.D.Bhosale Mr.Shishir Joshi i/b. Ms.Priti S.Joshi Mr.Kiran Gandhi with Ms.Shyamali Gadre i/b. Ms. Sukhada Wagle i/b. Hariani & Co. Advocates.
Judgment :
Per Dr. D.Y. Chandrachud, J.
Service Tax on renting:
In 1994, Parliament legislated to provide for the imposition of a service tax. Section 65 of the Finance Act of 1994 defined taxable services, among other things. Section 66 provided for the charge of service tax on taxable services. Section 67 dealt with the valuation of taxable services for charging service tax. Section 68 provided for the payment of service tax. Section 66 stipulated that there shall be levied a tax at the rate of 12% “of the value of taxable services” referred to in clause (105) of Section 65. Among the taxable services is the taxable service in sub-clause (zzzz), to which the constitutional challenge in these proceedings relates. Subclause (zzzz) was initially inserted by the Finance Act of 2007 with effect from 1 June 2007. Taxable service was defined to mean “any service provided or to be provided”:
“To any person, by any other person in relation to renting of immovable property for use in the course or furtherance of business or commerce.”
The expression “renting of immovable property” was defined in clause (90)(a) of Section 65 as follows:
“(90a) “renting of immovable property” includes renti
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