2021 (1) TMI 704 - HC - GST

Levy of service tax - reverse charge mechanism - provision for recovering service tax from the service recipient - HELD THAT - Central Government has issued several exemption notifications whereby services provided by an individual as an advocate or as a partnership frm 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 above, the impugned show cause cum demand notice has been issued mechanically. We direct as an interim measure, there shall be stay of the impugned show cause cum demand notice dated 28.12.2020 until further orders. Stand over to 15.03.2021.

Summary

Issues: Challenge to notice to show cause cum demand seeking to levy service tax for the financial year 2014-15 on an advocate, claiming exemption under Central Government notifications and provision for recovering service tax from service recipient.

Analysis:
The High Court of Bombay heard a writ petition challenging a notice issued by the Assistant Commissioner of Central Goods and Services Tax (CGST) seeking to levy service tax on the petitioner, who is an advocate, for the financial year 2014-15. The petitioner contended that services provided by advocates are exempt from service tax under various exemption notifications issued by the Central Government. Additionally, there is a provision for recovering service tax from the service recipient. The petitioner argued that the impugned notice was issued mechanically, ignoring these exemptions and provisions.

After hearing the arguments, the Court directed, as an interim measure, a stay on the impugned show cause cum demand notice until further orders. The Court scheduled the matter to be heard again on a future date. The order was to be digitally signed by the Private Secretary of the Court, and all concerned parties were instructed to act upon the digitally signed copy of the order provided via fax or email.