High Court grants relief to advocate by granting stay on Service Tax demand

High Court grants relief to advocate by granting stay on Service Tax demand

The Bombay High Court (HC) has stayed a demand notice issued by the Assistant Commissioner of Central Goods and Services Tax (CGST), seeking to levy service on an advocate

The division bench consisting of Justice Ujjal Bhuyan and Milind N. Jadhav granted relief to the advocates and held, "There shall be stay of the impugned show cause cum demand notice dated 28 December 2020 until further orders."

Mr. Sanjiv Madhusudan Shah (petitioner) challenged the show cause cum demand notice issued by the Assistant Commissioner of Central Goods and Services Tax (CGST), Mumbai West. In the said notice issued by the CGST Department, it was mentioned that the petitioner is liable to levy service tax for the financial year 2014-15 (FY).

The petitioner is an advocate by profession and according to a notification issued by the Central Government, there were certain exemptions made under the said notifications. In the notification, the services provided by an individual such as an advocate or by a partnership firm of advocates by way of legal services are exempted from being charged under the head of service tax.

The petitioner averred that partnership firms of lawyers providing services to individuals and individual advocates providing representational services to companies or business entities or individuals are exempted under the said notification issued by the Central Government.

It was further contended by the petitioner that there is a separate provision for recovering service tax from the service recipient. The impugned show cause cum demand notice has been issued mechanically and hence it should be quashed for want of justice.

The petitioner further contended that the CGST Department has ignored the notification of the Central Government while issuing the show cause cum demand notice to him.

A major relief was granted by the HC to the advocate by granting a stay to the demand notice cum order of the CGST Department.

The next date of hearing is on 15 March 2021.