ALL INDIA FED. OF TAX PRACTIONERS vs UNION OF INDIA .

The Supreme Court upheld the legislative competence of Parliament to levy service tax under Article 246(1) and Entry 97 of List I of the Seventh Schedule to the Constitution, affirming the Bombay High Court's judgment. The Court clarified that the imposition of service tax on services rendered by chartered accountants and architects is valid, despite challenges based on Entry 60 of List II and Article 276. The Court concluded that service tax is an indirect tax essential for revenue generation, particularly as the service sector significantly contributes to the GDP.