2024 (12) TMI 950 - HC - Service Tax

Challenge to impugned Order-In-Original and the impugned letter - levy of service tax on legal services - HELD THAT - The issue raised in this Petition is squarely covered by the decision of the Coordinate Bench of this Court in Adv. Pooja Patil Vs/ The Deputy Commissioner, CGST and CX Division VI, Raigad Commissionerate Ors. 2024 (2) TMI 355 - BOMBAY HIGH COURT . This decision, on considering the earlier precedent as well as notifications on the subject, held that ' It is thus clear that as set out in the Notification, 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'. Similarly Notification No. 25/2012 dated 20th June, 2012, also clearly provides that the service provided by an individual advocate, partnership firm of advocates, by way of legal services being exempted from levy of service tax.' Petition allowed.

Summary

Issues:
Challenge to impugned Order-In-Original and letter, Interpretation of notifications regarding service tax on legal services.

Analysis:
The High Court of Bombay heard the challenge to an Order-In-Original and a letter dated 30 November 2022 and 05 June 2024, respectively. The primary issue revolved around the interpretation of notifications related to the levy of service tax on legal services provided by individual advocates or firms of advocates. The court referred to a previous decision by a Coordinate Bench in a similar case and highlighted the observations made in that judgment. The court emphasized that the notifications clearly exempted legal services from the levy of service tax. The court also noted that the Designated Officer had acted without jurisdiction by disregarding the binding notifications. The court cited various legal precedents to support its decision, ultimately concluding that the impugned order was passed contrary to the notifications and, therefore, needed to be quashed and set aside in the interest of justice.

The court's decision was influenced by the clarity of the notifications exempting legal services from service tax, which were not considered in a previous case. The court found that remanding the matter to the Designated Officer would serve no useful purpose, leading to the decision to quash and set aside the impugned order. The court allowed the petition, making the Rule absolute in favor of the petitioner. The court granted the prayer clause (a) of the petition, which sought the issuance of a writ to quash and set aside the impugned show cause notice, the Order-In-Original, and the impugned letter. The court concluded the judgment by stating that there would be no orders for costs in this matter.