2011 (9) TMI 112 - HC - Service Tax

Pandal or shamiana - Hindu Marriage - Social function - Imposition of service tax under Section 65(105)(zzzz) and Section 66 of the Finance Act, 1995 - 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 learned counsel 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 and we so do - decided in favor of revenue.

Summary

Issues:
Challenge to the constitutionality of Section 135(A)(10) of the Finance Act, 2007 and imposition of service tax on the erection of 'pandal or shamiana' for a Hindu marriage.

Analysis:
The petitioner invoked the jurisdiction of the High Court under Article 226 of the Constitution of India, seeking various reliefs, including quashing Section 135(A)(10) of the Finance Act, 2007, as unconstitutional. The petitioner argued that the erection of a 'pandal or shamiana' for a Hindu marriage should not be considered a social function for the purpose of service tax, as it is in furtherance of religious ceremonies. The Full Bench of the Court had previously held that the provisions of Section 65(105)(zzzz) and Section 66 of the Finance Act, 1994, as amended by the Finance Act, 2010, are constitutionally valid. The Court overruled the challenge to the retrospective effect of the amendment, declaring it constitutionally valid.

The petitioner contended that no service tax should be levied on the erection of 'pandal or shamiana' for a Hindu marriage, arguing that it is a sacred religious function and not a social function. The Court referred to the definitions of 'pandal or shamiana' under Section 65(77a) and (77b) of the Finance Act, which include places prepared for organizing social functions, with an explanation that social function includes marriage. The Court noted that the statute itself recognizes marriage as a social function when a 'pandal or shamiana' is used, involving a service component. Therefore, the Court rejected the argument that Hindu marriage should not be subject to service tax as a social function, emphasizing that the use of 'pandal or shamiana' qualifies it as such.

In conclusion, the Court found no merit in the writ petition challenging the imposition of service tax on the erection of 'pandal or shamiana' for a Hindu marriage. The petition was dismissed without any order as to costs.