Adarsh Kumar Goel, J.

1. This petition seeks declaration of provisions of Section 65(90a) and Section 65(105)(zzzz) of the Finance Act, 1994 as ultra vires the Constitution.

2. Case set out in the petition is that the petitioner is a public limited company and owner of commercial immoveable property at Parwanoo, District Solan in the State of Himachal Pradesh. It has let out the said property to business entities. It is receiving rent @ Rs. 1,75,000/- per month as per agreement Annexure P.-1. The transaction of lease is subject to levy of stamp duty under the Indian Stamp Act, 1899 and is governed by Transfer of Property Act, 1882. The subject matter of property and leasing are covered by field assigned to State legislature and, thus, outside the purview of the Central Legislature.

3. In the reply filed on behalf of the Union of India, stand taken is that renting of property was different from sale of goods or transfer of property or conveyance. The transaction is not covered by tax on sale of goods. Providing of service with respect to property was covered by service tax. Other similar transactions of service in relation to property were service of Mandap Keepers [Section 65(105)(m)], Pandal Shamiana [Section 65(105)(zzw)], Convention Service [Section 65(105)(zc)], Right to use properties for business purposes under business support service [Section 65(105)(zzzq)]. The levy was not covered under Entry 18 not being tax on land or building but only on service element. The tax was connected with land or building but was not on land or building. The levy was also not covered under Entry 45 being not land revenue nor by Entry 49 which contemplated direct tax. Service tax was on consideration received for allowing use of the premises. Under Article 246(1), Parliament had exclusive power to make laws in respect of matters covered under List-I including residue entry. As regards retrospectivity, it has been stated that the amendment was clarificatory. The levy was already provided even under un-amended provisions. The object of the amendment was to overcome the judgment of Delhi High Court against which appeal was pending before the Hon#25;ble Supreme Court. Judgment of Delhi High Court having not become final, the service providers were required to collect tax even if the same could not be collected on account of the said judgment.

4. We have heard learned counsel appearing in this petition as well as learned counsel for the petitioners in connected petitions and perused the record.

5. Question for consideration is whether levy of service tax on providing of service to any person by any other person by renting of immovable property for business was covered by Entry 49 List-II exclusively and not covered by Entry 92C or 97 of List-I and thus, was outside the purview of the Central legislature. Further question is as to validity of levy being made retrospectively operative from 1-6-2007.

6. Contentions raised on behalf of the petitioners are as follows :-

(i) Subject matter of levy of service tax on providing service of renting of property was covered by Entry 49 List- II and not by Entry 92C or 97 of List-I. In any case, retrospectivity of the levy was beyond legislative competence. Reliance has been placed on judgment of Delhi High Court in Home Solution Retail India Ltd. [2009 (14) S.T.R. 433 (Del.) = 2009 (237) E.L.T. 209 (Del.)] and judgment of Hon#25;ble the Supreme Court in Ajay Kumar Mukherjee v. Local Board of Barpeta , AIR 1965 S.C. 156. (ii Transfer of property without any value addition by way of service could not be covered by the levy of service tax.

7. On the other hand, submission on behalf of Union of India is that scope of Entry 49 List-II was limited to direct tax on the property and not on any activity in relation to property. In any case, Entry 49 List-II had to be read subject to Entries 92C and 97 of List-I. Reliance has been placed, inter alia , on judgments of Apex Court in Union of India v. Shri H