Orissa High Court: In a civil writ petition by a practicing advocate against the service tax notice of Rs. 2,14,600/- served upon him, the Division Bench of Chief Justice Harish Tandon and B.P. Routray, J. allowed the petition, and quashed the impugned notices, reiterating that lawyers with their individual practice are exempt from levy of GST and service tax.
The advocate-petitioner was served with the impugned notice demanding service tax of Rs. 2,14,600/- for the Financial Year 2015-16 in terms of Section 73 of the Finance Act, 1994. This was followed by the notice of recovery of service tax of Rs. 2,14,600/- and penalty of Rs. 2,34,600/- plus interest by the Superintendent (ARC), GST and Central Excise, Bhubaneswar-II Division.
The Department- respondent filed their counter stating that the demand-cum-show cause notice was issued under the provisions of Section 73 of the Finance Act for non-payment of service tax and that he did not cooperate with the authorities, and as such, the adjudication process was completed ex-parte.
The Court reiterated the settled position by the Court in Devi Prasad Tripathy v. Principal Commissioner CGST and Central Excise Bhubaneswar1, that the practicing advocates should not face harassment on account of the Department issuing notices calling upon them to pay service tax / GST when they are exempted from doing so, and in the process also having to prove they are practicing advocates. The Court noted the Department’s instruction dated 09-04-2021, that the services provided by an advocate or a Partnership firm of advocates providing legal services to any person other than a business entity and a business entity with a turnover up to rupees ten lakhs in the preceding financial year are exempted from the levy of service tax.
In the matter at hand, the Court pointed out that the petitioner is a legal practitioner and hence, exempted from the levy of service tax for such income he derived from his legal service as a Lawyer. Thus, the demand-cum-show cause notice dated 15th April, 2021 and the order of recovery were quashed to the extent they relate to the demand for service tax from the income from his profession as an individual lawyer.
[Shivananda Ray v. Principal Commissioner CGST, 2025 SCC OnLine Ori 1442, decided on: 07-04-2025]
Advocates who appeared in this case:
For the petitioner: M.M. Patnaik, Advocate
For the respondent: T.K. Satapathy, Sr. Standing Counsel
1. W.P.(C) No.27727 of 2020.
