No notice demanding payment of Service Tax/GST will be issued to lawyers rendering legal services: Orissa HC

Madras HC: held that no notice demanding payment of service tax/GST will be issued to lawyers rendering legal services and falling in the negative list, as far as GST regime is concerned.

The deponent insisted that the Petitioner should have submitted “documentary evidence to prove his claim that he is a practicing individual lawyer and does not come under the provision of GST or service tax.”

Facts

• The Notification dated 20th June 2012, issued for the service tax liability of an individual advocate is Nil for legal services rendered to any of business entities located in the taxable territory.
• The counter-affidavit filed acknowledges that a similar notice was issued to the Petitioner in 2017 to which he replied, pointing out how he was not liable to pay any service tax.
• P. K. Parhi, learned Assistant Solicitor General of India, has fairly admitted that no notice in the first instance ought to have been issued to the Petitioner, who is a practicing advocate. However, when specifically asked whether the clear instructions have been issued by the Department to all the officers involved in the enforcement of the GST regime that practicing advocates should not be issued notices, he sought time for instructions.

Findings

During the hearing, certain other advocates present in the Court stated that they too have received such notices. It appears that despite knowing fully well that advocates are not liable to pay service tax or GST, notices continue to be issued to them by the GST Commissionerate.

Judgment

Madras HC held that the practicing advocates should not have to face harassment on account of the Department issuing notices calling upon them to pay service tax/GST when they are exempted from doing so, and in the process also having to prove they are practicing advocates. The Commissioner GST is directed to issue clear instructions to all the officers in the GST Commissionerate’s in Odisha that no notice demanding payment of service tax/GST will be issued to lawyers rendering legal services and falling in the negative list, as far as GST regime is concerned. Copies of such instructions be placed before the Court on the next date.