Legal Services Provided By Individual Advocate, Partnership Firm Of Advocates Exempted From Service Tax: Bombay High Court

The Bombay High Court has held that the service provided by an individual advocate, a partnership firm of advocates, by way of legal services is exempt from levy of service tax.

The bench of Justice G. S. Kulkarni and Justice Kishore C. Sant has observed that the taxable service in respect of services provided or to be provided by the individual advocate for a firm of advocates has been set out to be 'Nil'. The Notification No. 25/2012, dated June 20, 2012, also clearly provides that the service provided by an individual advocate, a partnership firm of advocates, by way of legal services, is exempt from the levy of service tax.

The petitioner/assessee is a practicing advocate and has challenged an order passed by the Deputy Commissioner, CGST and Excise, by which an amount towards service tax was ordered to be recovered from the petitioner, inter alia, with interest and penalty.

The petitioner contended that the department, in passing the order, acted out of a patent lack of jurisdiction; hence, interference by the Court in the proceeding would be justified. There are several procedural illegalities, amounting to a breach of the principles of natural justice, in passing the order.

The petitioner argued that the order would be required to be set aside on two primary grounds. Firstly, the show-cause notice on the basis of which the impugned order has been passed was neither issued nor received by the petitioner. The order is in the teeth of the respondent's own notification(s) dated June 20, 2012, namely Notification No. 25-30/2012-Service Tax, which categorically exempts individual advocates from the purview of taxable services and the levy of any service tax. Once the order itself was without jurisdiction and in the teeth of the notification, which was binding on the designated officer, he could not have passed the order.

The court noted that the Designated Officer, although it was pointed out that he would not have jurisdiction to take forward the proceedings, as service tax was not leviable on the individual advocate, as per the provisions of notification, such contention has not been considered by the Designated Officer in passing the order.

The court stated that no useful purpose would be achieved in the present proceeding remanding to the Designated Officer.

The court deemed it fit in the interest of justice to quash and set aside the order for the reasons that the designated officer has acted without jurisdiction and as the impugned order is passed patently, contrary to the notifications dated June 20, 2012.

Counsel For Petitioner: Chetan Kapadia

Counsel For Respondent: Sangeeta Yadav

Case Title: Adv. Pooja Patil Versus The Deputy Commissioner

Case No.: Writ Petition No.1085 Of 2024

Click Here To Read The Order