Provide Clear Guidelines To Prevent Practicing Lawyers From Receiving Notices For Payment Of Service Tax On Legal Services - Allahabad HC

The Allahabad High Court has issued a directive to the GST Commissionerate in Lucknow, instructing them to provide clear guidelines to prevent practicing lawyers from receiving notices for payment of service tax or GST on their legal services. This directive was given by a bench consisting of Justice Jyotsna Sharma and Justice Alok Mathur, who also expressed their concern over receiving complaints from other lawyers who have faced similar notices.

The Court's decision was a response to a petition filed by lawyer Pankaj Khare, who contested an order issued on May 22, 2023, by the Deputy Commissioner of CGST and Central Excise Division in Lucknow. This order demanded a service tax payment of ₹33,2651 from Khare. The petitioner argued that the order was illegal, arbitrary, and lacked jurisdiction. Moreover, the petitioner pointed out that a notification dated June 20, 2012, stated that individual advocates were not liable to pay any service tax for their services provided to business entities in taxable territories.

Accordingly, the petitioner, being a practicing advocate, claimed exemption from paying the service tax, as brought to the Court's attention.

In the meantime, the government authorities' counsel informed the bench that the case against the petitioner had been dropped by an order dated June 6, 2023. However, despite this development, the Court expressed its concerns regarding the harassment faced by practicing lawyers as a result of receiving such tax notices.

As a resolution, the Court decided to dispose of the plea and issued a directive to the relevant authorities, instructing them to refrain from issuing such notices to lawyers in the future.