Bombay HC stayed the demand notice seeking Service Tax from Advocate

Last updated: 30 March 2021

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Quick Summary

The Bombay High Court has issued an interim stay on a demand notice seeking service tax from Advocate Sanjiv Madhusudan Shah for the financial year 2014-15. The advocate argued that legal services provided by advocates are exempt from service tax under various government notifications. The court has sought a response from the tax authorities and suspended the demand notice pending further orders.

Court :
Bombay High Court

Brief :
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.

Citation :
Writ Petition (L) No. 646 of 2021 dated January 12, 2021

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.

FAQ :

The Bombay High Court has granted an interim stay on a demand notice seeking service tax from an advocate.

Advocate Sanjiv Madhusudan Shah challenged the show cause cum demand notice issued by the Assistant Commissioner of CGST, Mumbai West.

The advocate argued that services provided by an individual advocate by way of legal services are exempt from service tax under Central Government notifications.

The Bombay High Court has stayed the demand notice as an interim measure until further orders are issued.

The order was issued on January 12, 2021.

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Judgement posted by

Bimal Jain

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FCA, FCS LLB with21 Yrs of Experience inTaxation Indirect and Direct: Education Qualification: B.Com (Hons) Chartered Accountants Company Secretary LLB Qualified SAP FI/CO Consultants Professional Membership: Chairmanof Indirect Tax Committee of PHD Chamber of Commerce Member of Indirec ... Read more

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