S.C. Dharmadhikari, J.

1. Rule.

2. The Respondents waive service. By consent of parties, Rule is made returnable forthwith.

3. By this Writ Petition under Article 226 of the Constitution of India, the Petitioners are claiming a writ, order or direction declaring clause (zzzzv) of Section 65(105) of the Finance Act, 2010 as ultravires the Constitution of India, null, void and of no legal affect. It is prayed that the said provision be struck down as violative of the mandate of Articles 14, 19(1)(g), 245, 246, 265, 300A and 366(29A)(f) of the Constitution of India. Consequently, the relief restraining the Respondents from giving effect to the said provision directly or indirectly, so also, levying or attempting to levy any service tax under the impugned provision is also claimed.

4. Few facts which are necessary for appreciating the rival contentions are that the Petitioner No.1 before us is an Association registered under the Trade Union Act, 1926 and claims that it has 2000 Hotels in Greater Mumbai and 500 Associate members outside Greater Mumbai and within the State of Maharashtra. They are all holding licences to serve the foreign liquor (FL-III licence). The Petitioner No.2 is one of the Restaurant serving food and drinks. It is a member of the Petitioner No.1 Association. After tracing the history as to how the licences to serve foreign liquor are issued, what the Petitioners contend is that the Respondent No.1 is the Union of India. The Respondent Nos.2 to 6 are the Authorities exercising powers for levying, assessing and recovering, so also, collecting service tax.

5. It is then stated that the service tax was introduced in India by the Finance Act, 1994. The Service Tax was legislated by the Parliament under the residuary entry i.e. Entry 97 of List I of the Seventh Schedule to the Constitution of India. Section 65 of the Finance Act deals with taxable services. A number of services were sought to be made exigible to service tax by way of amendments to Section 65 of the Finance Act. While so, the Central Government by the Finance Act, 2011 made an amendment to Chapter V of the Finance Act 1994, relating to service tax, inserting sub-clause (zzzzv) to clause 105 of Section 65, thereby, including one more category within the Service tax net. Annexure P2 to the Writ Petition is a copy of the relevant provision as inserted by the Finance Act, 2011. The relevant provision in Section 65 of the Finance Act in relation to air conditioned restaurants which has license to serve alcoholic beverages as it stood after the Finance Act 2011, reads as follows:-

“Sub clause – (zzzzv) of clause (105) of Sec. 65:

In this chapter, unless the context otherwise requires a taxable service means any service provided or to be provided to any person by a restaurant, by whatever name called, having the facility of air-conditioning in any part of the establishment, at any time during the financial year, which has license to serve alcoholic beverages, in relation to serving of food or beverage, including alcoholic beverages or both, in its premises”.

6. It is stated that in exercise of the powers conferred under Section 93(1) of the Finance Act 1994, the Government of India, amended with effect from 1.5.2011 the Notification number 1/2006 Service Tax dated 1.3.2006, exempting the taxable services of the description specified in column 3 of the table in the Notification from so much of the service tax leviable thereon under Section 66 of the Finance Act 1994, as is in excess of the service tax calculated on a value which is equivalent to the percentage specified in column number 5 of the said table, of the gross amount charged by the service provider for providing the taxable service. Annexure P3 to the petition is a copy of the notification number 1/2006 – Service Tax dated 1.3.2006 issued by the Ministry of Finance Government of India and AnnexureP4 is a Notification No. 34/2011 dated 25.04.2011 issued by the Government of India, Mi