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2017 (3) TMI 1417 - HC - Service TaxConstitutional validity of amendments made in the FA, 1994 (Service Tax) by the FA, 2016, whereunder the Section 65B was amended, as being ultra vires the Constitution of India under Entry 34 and Entry 62 of List II of the Seventh Schedule of the Constitution of India - lottery - whether the transactions in buying and selling lottery tickets are not liable to Service tax under the provisions of the FA, 1994 as amended by the FA, 2016? - N/N. 18/2016-ST dated 01.03.2016. Held that: - it is evident that the service tax was intended on promotion, marketing, organizing, selling of lottery or facilitating in organizing lottery of any kind, in any other manner. By the impugned amendment a cosmetic change has been made in the Amendment Act, 2010, as initially the words “any person or any other person” was used. In 2015, it was modified to the extent that any activity carried out, for a consideration, in relation to or for facilitation of, a transaction in money except an actionable claim excluding the activity carried out (a) by a lottery distributor or selling agent in relation to promotion, marketing, organizing, selling of lottery or facilitating in organizing lottery of any kind, in any other manner. The lottery distributor or selling agent is a person appointed or authorized by a State for the purpose of some activities. Article 268A, which was incorporated by the Constitution (Eighty-eighth Amendment) Act of 2003, has recently been omitted by the Constitution (One Hundred and First Amendment) Act, 2016. Entry 92C was inserted by the same constitutional amendment, but admittedly never notified, as pleaded by the learned counsel appearing for the parties and the same has also been omitted by the Constitution (One Hundred and First Amendment) Act, 2016. Thus, reliance can be placed on Entry 97 invoking competence to impose service tax. However, Article 268C confers power and competence on the Union-Parliament to levy service tax on the service providers for consideration. Union- Parliament is conferred with the power and competence under Article 268A read with Entry 97, List I (Union List) to impose and levy service tax on other related activities, as aforestated. The impugned amendment brought in Finance Act, 2016 is not unconstitutional. When consideration is unascertainable for the services rendered by a distributor or selling agent, the service tax is not imposable and liable to be set aside. The amendments carried out by the Finance Act, 2016, are not capable to being implemented for imposition and levy of the service tax on the services allegedly provided by the petitioners - petition allowed - decided partly in favor of petitioner.
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