Service tax is not a tax on profession as an engineer.

Sirpurkar, J.

W.P. No. 7273 of 1998 has been filed by the Chairman, Institution of Valuers, Tamil Nadu Zone, which institution was constituted in 1968 and is a registered society. The members of the petitioner institute are the estate valuers and most of them are recognised as such under section 34AB of the Wealth-tax Act, 1957. In the instant petition, the petitioner claims a writ of prohibition or any other writ, prohibiting the respondent from invoking the provisions of section 88, Chapter VI of the Finance Act, 1997 for the purpose of levy and collection of service tax from the members of the petitioner institute on and from 7-7-1997 in respect of the services rendered by the petitioner's members as 'valuers' of the properties, plant and machinery, etc. They also have prayed for quashing of the communication sent by the respondent on 1-5-1998 vide C. No. IV/16/29/97-STC.

The respondent, Commissioner, Chennai, by its letter dated 1-5-1998 informed the Chairman of the Institution of Valuers that as per sub-clause (g) of clause (48) of section 65 of the Finance Act, 1994 ('the Act') as amended, the term 'taxable service' has been defined as any 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 is deemed to be a 'taxable service'. Similarly, it was then pointed out that the members of the petitioner-institution could be covered under the definition of 'consulting engineer' as they were professionally qualified engineers and were directly or indirectly rendering consultancy or technical assistance to a client in one or more disciplines of the engineering. It was then pointed out that the Directorate of Service Tax, Mumbai, in their letter dated 27-3-1998 had clarified that the services rendered as 'valuers' of immovable property other than agricultural lands, plantations, forest, mines and quarries and as valuers of plant and machinery would fall within the purview of 'services' rendered by 'consulting engineers' and would attract the service tax. Along with this, a copy of the service tax Trade Notice No. 13 of 1997 was also sent. The petitioner was, therefore, requested to inform all the 'valuers', who were covered under the levy to register them with the department. It is presumably this communication which is challenged in the present petition and the main contention is that the registered valuers who are acknowledged as such under section 34AB would not be covered by the provisions of the Finance Act which came to be made applicable by section 88, Chapter VI of Act, 1997 for the purposes of levy and collection of service tax.The basic argument raised by Mr. Rajappa, learned counsel who argued the matter on behalf of the petitioner-institute, is that the Finance Act does not apply to the members of the petitioner-institute at all as the 'registered valuers' cannot be brought in the definition of the term 'consulting engineer' nor can the 'services' that they render be said to be a 'taxable service' by a consulting engineer. The argument is that the very nature of the work that the registered valuers do has got nothing to do with the 'engineering discipline' and their task is merely to evaluate the property. In case of the valuers of machinery also the argument is that their services of evaluation cannot be deemed to be 'taxable service'.

On this backdrop, it will be better to see the impugned provisions of the Act. Section 65(13) is the definition clause, defining the term 'consultancy engineer'. It reads as follows :

"(13). 'consulting engineer' means any professionally qualified engineer or an engineering firm who, either directly or indirectly, renders any advice, consultancy or technical assistance in any manner to a client in one or more disciplines of engineering;"

Section 65(48)(g) defines the term 'taxable service' in case of a 'consulting engineer' as under :

"(g) to a client, by a consulti