Whether pandal or shamiana used for a marriage is liable for service tax?

PJ/Case Laws/2011-12/1416

Citation: -2011 (24) S.T.R. 385 (Del.)

Case: -ALL INDIA TENT DEALERS WELFARE ORGANIZATION versus UNION OF INDIA

Issue: - Whether pandal or shamiana used for a marriage is liable for service tax?

Brief Facts:- Invoking the jurisdiction of this Court under Article 226 of the Constitution of India, the petitioner has prayed for the following reliefs:-

(a) Issue a writ, order or direction in the nature of certiorari that Section 135(A)(10) of the Finance Act, 2007 be quashed as unconstitutional.

(b) Issue a writ, order or direction in the nature of certiorari that erection of a Pandal/Shamiana for marriage is in furtherance of religious ceremonies, rites and rituals which are to be performed for the religious function and should not be considered as social function for the purpose of service tax.

(c) Issue a writ, order or direction in the nature of certiorari that no Service Tax be levied on erection of Pandal/Shamiana for Hindu marriage as it is providing the said activities/services to a religious function and by quashing the said amendments as unconstitutional.

(d) Issue a writ, order or direction in the nature of certiorari restraining the respondents from levying and/or collecting any service tax on erection of pandal or shamiana for a Hindu marriage.

(e) Pass such other and further order(s) as this Hon'ble Court may deem fit and proper in the circumstances of the present case.

Appellant’s Contention:Appellant contended that no service tax can be levied on the erection of "pandal or shamiana", for a Hindu marriage is fundamentally a sacrosanct and sacred religious function and can never be treated as a social function to invite the levy of service tax. For this, Section 65(77a) and (77b) has been referred.

Reasoning of the Judgment:It is worth noting that the Legislature, by the Finance Act, 2007, has inserted an explanation to Section 65(77a).

If the entire provision is properly understood, it is clearly discernible that Hindu marriage is not treated or regarded a social function per se. If the dictionary clause is appositely appreciated, there can be no trace of doubt that only when a "pandal or shamiana" is used for marriage, it earns the status of "social function" because the service component is involved. It is worth noting, the statute itself postulates that marriage is to be regarded as a social function and full effect has to be given to the same. That apart, the pre-requisite is the use of "pandal” or shamiana" and, therefore, the contention raised by the appellant that Hindu marriage is not a contract but a sacred institution and hence, no service tax is imposable treating it as a social function has to be repelled.

Decision:Petition dismissed.

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PJ/Case Laws/2011-12/1416

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