B.N. Srikrishna, CJ.

This Writ Petition under Art.226 of the Constitution of India impugns the constitutional validity of Service Tax levied under the Finance Act, 1998 (2 of 1998) on taxable service rendered by practising Chartered Accountants.

2. The petitioner is an Association of Chartered Accountants in Kerala registered under the Travancore Cochin Charitable Societies Act, which impugns the service tax levied on its members by reason of Ss.64 to 96 of the Finance Act, 1994, (32 of 1994), as amended by Finance Act, 1998 (2 of 1998).

Background of the levy :

As an off-shot of the recommendations of the Dr. Raja Chelliah Committee in 1990, for the first time, in the Union Budget for 1994-95, a levy of service tax on service relating to three categories, i.e., stock brokers, general insurers and telephone services was imposed. The Raja Chelliah Committee had observed that indirect tax at the Central level should be broadly neutral in relation to production and consumption of goods and should, in course of time, cover commodities and services. It felt that the country should move towards full-fledged Value Added Tax (V. A. T. ) in due course covering services and commoditi