Issue clear instructions not to issue Service Tax, GST notices to lawyers: Allahabad High Court to GST Commissioner

The Allahabad High Court recently directed the Goods and Services Tax (GST) Commissionerate at Lucknow to issue clear directions so that notices for payment of service tax or GST are not issued to practicing lawyers for rendering legal services [Pankaj Khare v UOI]..A bench of Justice Jyotsna Sharma and Justice Alok Mathur also expressed concern that other lawyers have also complained of similar notices having been issued to them. ."The Commissioner, GST is directed to issue clear direction to the GST Commissionerate in Lucknow that no notices regarding payment of service tax /GST is issued to the lawyers rendering legal service falling in the negative list so far as service tax is concerned," the Court ordered..The Court passed the order on a plea by a lawyer, Pankaj Khare, who had challenged a May 22, 2023 order issued by the Deputy Commissioner, CGST and Central Excise Division, Lucknow. The said order had imposed a service tax of ₹33,2651 on him. The petitioner contended that the order was illegal, arbitrary and without jurisdiction. .The petitioner also highlighted that according to a notification dated June 20, 2012, the service tax payable by individual advocates was nil for services rendered to any business entity situated in a taxable territory. Therefore, the petitioner, being a practicing advocate, is exempt from paying service tax, the Court was told..Meanwhile, the counsel for the government authorities informed the bench that the proceedings against the petitioner had since been dropped by an order dated June 6, 2023..Nevertheless, the Court expressed concerns over the harassment faced by practicing lawyers due to such tax notices. Therefore, it proceeded to dispose of the plea after directing the concerned authorities to issue a clear direction not to issue such notices to lawyers. "This Court expresses its concern that practicing advocates should not have to face harassment on account of the department issuing notices and calling upon them to pay service tax/GST when they are exempted from doing so and in the process also calling them to prove that they are practicing advocates," the Court said. .Advocate Yogesh Chandra Srivastava represented petitioner while Advocate Dipak Seth represented respondent-authorities..[Read Order]