2015 (3) TMI 183 - HC - Service Tax

Levy of service tax on Film Artistes - Discrimination between artistes in theatre & drama and artistes in Film - violation of Article 14 and 19(1)(g) of the Constitution of India - Notification No.25/2012 dated 20.06.2012 - Service tax exemption only to performing artistes in theatre & drama, and not artistes in Film - Film actors performs similar skills as artists performs in theatre or drama - Intent to support native art and cultural - Held that - From the Judgment 2007 (5) TMI 325 - SUPREME COURT OF INDIA , it is clearly establish, in our view, that taxation statutes have to be dealt with on a different plank with due deference to the legislative intent. Much latitude is allowed to the State for classification upon a reasonable basis, and what is reasonable is a question of practical details and variety of factors which the Court would be reluctant and ill-equipped to investigate. It is in the aforesaid context of a taxing statute that the principles of Article 14 of Constitution of India are sought to be applied to claim relief by the writ petitioner, while, in our view, the two categories are clearly different and distinguishable and cannot be treated at parity. The mere fact that there is an element of drama or acting both in case of theatre and in case of films does not mean that the two activities are identical, taking into consideration the circumstances in which films are made and theatre is performed. In fact we asked the learned counsel for the petitioner as to whether the petitioner would perform at the rates at which theatre artistes perform. It is towards the object of Article 229 of the Constitution of India that a salutory endeavour has been made to give support to native art and culture and encourage them as they suffer from financial constraints. This is not the position of films. - Decided against the assessee.

Summary

Issues:
Challenge to notification providing exemption to performing artists in theatre and drama but not to film actors under service tax law.

Analysis:
The petitioner challenged a notification granting exemption to services by performing artists in theatre and drama but not to film actors under service tax law. The petitioner, a film actor, argued that the classification was discriminatory and violated constitutional provisions. The respondents justified the classification based on the distinction between film actors and native artists in theatre, emphasizing the need to protect cultural and educational rights under Article 29 of the Constitution. They cited legislative classification and previous court judgments to support their stance.

The court examined the constitutional validity of the notification and the classification of performing artists. Referring to legal precedents, the court emphasized the deference owed to legislative judgment in tax matters. The court highlighted that taxation laws must satisfy Article 14 of the Constitution, allowing for reasonable classification based on the efficiency of achieving the statutory objective. The court underscored that taxation statutes require a different approach, with latitude given to the state for classification on a reasonable basis.

In analyzing the petitioner's claim, the court differentiated between theatre artists and film actors, noting the distinct nature of their work and financial circumstances. The court questioned whether the petitioner would accept theatre rates, highlighting the support extended to native art and culture under Article 29. Ultimately, the court found the petition misconceived and lacking merit, dismissing it without costs. The judgment upheld the validity of the notification and the classification of performing artists in theatre and drama under the service tax law.