Bombay HC stayed the demand notice seeking Service Tax from Advocate

The Hon’ble Bombay High Court in Sanjiv Madhusudan Shah v. Assistant Commissioner of Central and Service Tax and ors. [Writ Petition (L) No. 646 of 2021 dated January 12, 2021] has stayed a demand notice issued, seeking to levy service tax upon an Advocate.

Facts:-

Sanjiv Madhusudan Shah (“the Petitioner”), who is an Advocate by profession vide this writ petition has challenged the to show cause cum demand notice dated December 28, 2020 (“SCN”), issued to the Petitioner by the Assistant Commissioner of Central Goods and Services Tax (“CGST”), Mumbai West, seeking to levy service tax upon the Petitioner for the financial year 2014-15.

The Petitioner submitted that the Central Government has issued several exemption notifications whereby services provided by an individual as an advocate or as a partnership firm of Advocates by way of legal services are exempt from the charge of Service Tax. That apart, there is a provision for recovering Service Tax from the service recipient. Ignoring the same, the show cause cum demand notice has been issued mechanically.

Issue:

Whether service tax can be levied on an Advocate?

Held:

The Hon’ble Bombay High Court in Writ Petition (L) NO. 646 of 2021 dated January 12, 2021 issued notice to the Assistant Commissioner returnable in eight weeks for seeking response on the matter. Further, as an interim measure granted stay of the SCN until further orders.

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