HC stays notice issued by CGST to advocate for levying service tax

In a temporary reprieve for a city-based advocate, the Bombay High Court recently stayed a show cause cum demand notice issued against him for levying service tax.

The notice issued by the assistant commissioner of Central Goods and Services Tax (CGST) was stayed by a bench of Justices Ujjal Bhuyan and Milind Jadhav.

The judges also issued notice to the assistant commissioner seeking his response on the matter.

The bench was petitioned by advocate Sanjiv M Shah challenging the show cause cum demand notice issued to him for levying service tax.

To buttress his case, Shah relied on series of notifications issued by the Union government specifying who all are exempted from service tax. One such notification notified that the services provided by an individual as an advocate or as a partnership firm of advocates by way of legal services were exempted from the charge of service tax.

Shah further pointed out that the authority didn't follow the due procedure mandatory to be followed for seeking to levy service tax. He claimed that the notice impugned by him before the bench was issued in a "mechanical" form.

The bench has adjourned the matter till March 15, when the CGST authority has to spell its stand in the matter.

Notably, the Supreme Court had in January 2018 transferred cases pending in Delhi and Chhattisgarh High Courts to itself. These cases pertained to challenges to the service tax applicability on advocates.