2023 (10) TMI 821 - HC - Service Tax

Violation of principles of natural justice - opportunity of a hearing was not accorded to the petitioner before passing of the impugned order - demand of service tax as well as penalty order on practicing advocate registered with Bar Council of Maharashtra and Goa. HELD THAT - The respondent no. 1 needs to hear the petitioner on all the contentions on the issues urged in the present proceedings and pass a fresh order in accordance with law. The proceedings are remanded to respondent no. 1/the Assistant Commissioner, for a fresh order to be passed on the notice dated 30th December 2020, after hearing the petitioner on all the contentions the petitioner intends to raise - petition disposed off by way of remand.

Summary

Issues:
The challenge in this petition is to the impugned order dated 14th July 2023 by which respondent no. 1 held that the petitioner, a practicing advocate, is liable to pay service tax and penalties under Sections 77(1)(a) and 77(1)(c) of the Finance Act, 1994.

Natural Justice:
The primary contention raised is that the impugned order was passed without according the petitioner an opportunity of a hearing, thus breaching the principles of natural justice.

Levy of Service Tax:
The petitioner argued that service tax is not leviable on legal services provided by advocates, citing Department's Notification No. 25/2012 Service Tax dated 20th June 2012, which provides for a reverse charge mechanism in case of an Advocate. The petitioner also referred to relevant case laws to support this contention.

Court's Decision:
The High Court found merit in the petitioner's argument and held that respondent no. 1 needs to hear the petitioner on all contentions before passing a fresh order in accordance with law. Consequently, the impugned order dated 14th July 2023 was quashed and set aside, and the proceedings were remanded for a fresh order to be passed after hearing the petitioner.