2010 (10) TMI 4 - SC - Service Tax

Service Tax on leasing and hire purchase transaction - legislative competence of Parliament - Held that: - The service tax in the present case is neither on the material nor on sale. It is on the activity of financing/funding of equipment/ asset within the meaning of the words "financial leasing services" in Section 65(12)(a)(i). Lastly, we may state that this Court has on three different occasions upheld the levy of service with reference to Entry 97 of List I in the face of challenges to the competence of the Parliament based on the entries in List II and on all the three occasions, this Court has held that the levy of service tax falls within Entry 97 of List I. The decisions are in the case of T.N. Kalayana Mandapam Association (2005 -TMI - 135 - SUPREME COURT OF INDIA), Gujarat Ambuja Cements Ltd. (2008 -TMI - 225 - SUPREME Court) and All-India Federation of Tax Practitioners (2007 -TMI - 1556 - Supreme Court). - the service tax imposed by Section 66 of the Finance Act, 1994 (as amended) on the value of taxable services referred to in Section 65(105)(zm) read with Section 65(12) of the said Act, insofar as it relates to financial leasing services including equipment leasing and hire-purchase is within the legislative competence of the Parliament under Entry 97, List I of the Seventh Schedule to the Constitution. Accordingly, the appeals are dismissed with no order as to costs.