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2012 Supreme(Guj) 248
2012 (2) G.L.H 397
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
HARSHA DEVANI, R.M.CHHAYA
INSTITUTION OF VALUERS & 1 - Petitioner(s)
Versus
UNION OF INDIA & 1 - Respondent(s)
SPECIAL CIVIL APPLICATION No. 9762 of 2001
Decided on : 27/04/2012
For Petitioners: MR ANUJ TRIVEDI for MR MIHIR H JOSHI
For Respondents: MR GAURANG H BHATT
Headnote:
Finance Act, 1994 – Wealth Tax Rules – rule 8A – Liability Tax – Whether service as a valuer can be said to be service provided to a client by a consulting engineer, in relation to advice, consultancy or technical assistance in any manner, in one or more disciplines of engineering, making it a taxable service liable for payment of service tax under the relevant provisions of the Finance Act, 1994 –Held, Degree in engineering is not a mandatory requirement for being a registered valuer – Court does not find it possible to agree with the view taken by the Madras High Court which has not taken into consideration the other qualifications provided under sub-rules (2) and (8) of rule 8A of the Wealth Tax Rules – Question posed for determination by this court is answered in the negative, that is, in favour of the petitioner and against the respondents – Services rendered by the petitioners as valuers would not fall within the ambit of services rendered by a “consulting engineer” as defined under the Finance Act, 1994 – Respondents are, accordingly, restrained from levying service tax in respect of services provided by the petitioners as valuer to a client/any person as taxable service liable for payment of service tax as “consulting engineer” – Petition Allowed (Para 40, 39)
(Per : HONOURABLE MS.JUSTICE HARSHA DEVANI)
1. By this petition under Article 226 of the Constitution of India, the petitioner has posed the following question for determination by this Court:
“Whether service as a valuer can be said to be service provided to a client by a consulting engineer, in relation to advice, consultancy or technical assistance in any manner, in one or more disciplines of engineering, making it a taxable service liable for payment of service tax under the relevant provisions of the Finance Act, 1994 (as amended from time to time)?”
2. The facts as appearing in the petition are that the petitioner No.1 (hereinafter referred to as “the petitioner”) is the Gujarat Chapter of the Institution of Valuers representing the interest of about 200 members. The petitioner No.2 is a government approved valuer and authorized signatory of the petitioner No.1.
3. “Service tax” was introduced for the first time in the year 1994 by making provisions in Chapter V of the Finance Act, 1994 (hereinafter referred to as “the Act”). By virtue of section 84 of the Finance Act, 1997, sections 65, 66 and 68 of the Act came to be substituted and section 67 of the Act was amended so as to impose and levy a tax on services rendered inter alia by a “consulting engineer” to a client in relation to one or more disciplines of engineering. At the relevant time when the petition came to be filed, service tax was sought to be levied on the enumerated services including that rendered by a “consulting engineer” as stated above at the rate of 5% on the gross amount charged to the client.
4. Section 64 of the Act provides for extent, commencement and application of the Act and provides that the same shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and that it would apply to taxable services provided on or after the commencement of that Chapter. In relation to the service tax on taxable services by a “consulting engineer” which is subject matter of interpretation in this petition, the Central Government issued Notification No.23/97 appointing 7th July, 1997 as the date on which service tax on the said taxable services would come into force.
5. Section 65 of the Act is the definition clause and at the relevant time, the expression “consulting engineer” was defined under sub-section (31) of section 65 to mean any professionally qualified engineer or any body corporate or any other firm who, either directly or indirectly, renders any advice, consultancy or technical assistance in any manner to any person in one or more disciplines of engineering. Under the existing provisions of the Act, “consulting engineer” is defined under sub-section (31) of section 65 to mean any professionally qualified engineer or any body corporate or any other firm who, either directly or indirectly, renders any advice, consultancy or technical assistance in any manner to any person in one or more disciplines of engineering.
6. At the relevant time when the petition came to be filed, sub-section (48) of section 65 of the Act defined “taxable services” to mean any of the services enumerated thereunder. The taxable service under clause (9) thereof is any service provided to any person, by a “consulting engineer” in relation to advice, consultancy or technical assistance in any manner in one or more disciplines of engineering.
7. Under the existing provisions, “taxable services” is defined under sub-section (105) of section 65 of the Act. Taxable service under clause (g) thereof is any service provided to any person, by a consulting engineer in relation to advice, consultancy or technical assistance in any manner in one or more disciplines of engineering including the discipline of computer hardware engineering. The Explanation thereunder reads thus:
“Explanation – For the purposes of this sub-clause, it is hereby declared that services provided by a consulting engineer in relation to advice, consultancy or tech
