Kanwal Chaudhary Vs Insolvency And Bankruptcy Board of India & Ors (Delhi High Court)
The Delhi High Court considered W.P.(C) 9410/2021 and CM APPL.29223/2021 filed by an Advocate registered with the Bar Council of Delhi, challenging the IBBI communication/order dated 09 March 2021. The petitioner sought a direction that services provided by an Advocate under the Insolvency and Bankruptcy Code, 2016 as an Insolvency Resolution Professional (IRP) are covered under the reverse charge mechanism under Section 9 of the CGST Act and relevant notifications. According to the petitioner, the IBBI order directed him to furnish GST-compliant invoices for professional fees charged as an IRP on the basis that “Insolvency and Receivership” services were not covered under reverse charge.
The petitioner submitted that an Advocate acting as an IRP provides legal services and that GST should be charged on a reverse charge basis. He also challenged the IBBI’s jurisdiction and stated that the order was issued without reasons and without an opportunity of hearing. The Court issued notice to the respondents, permitted counter affidavits and rejoinder, if any, and listed the matter for 21 January 2022. Till further orders, the impugned order dated 09 March 2021 was stayed.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
Exemption allowed, subject to all just exceptions. Accordingly, the present application stands disposed of.
W.P.(C) 9410/2021 & CM APPL.29223/2021
Present writ petition has been filed challenging the Communication/order dated 09th March, 2021. Petitioner also seeks a direction that services provided by an Advocate under the Insolvency and Bankruptcy Code, 2016 as an Insolvency Resolution Professional (IRP) are covered under the reverse charge mechanism in terms of Section 9 of the Central Goods & Services Tax Act, 2017 (for short ‘CGST Act’) and notifications issued under the said Act from time to time.
Learned counsel for the Petitioner states that by way of the impugned order dated 09th March, 2021, Respondent no. 1/IBBI has directed the Petitioner, (who is an Advocate registered with the Bar Council of Delhi and governed by the Advocates Act, 1961) to furnish GST compliant invoices towards professional fees being charged by him in his capacity of IRP by holding that ‘Insolvency and Receivership’ services are not covered under ‘reverse charge mechanism’ under the CGST Act.
He states that an Advocate/Lawyer while discharging duties as IRP provides legal services and therefore GST has to be charged on reverse charge basis.
Learned Counsel for the Petitioner submits that the Respondent no.1/IBBI is neither the competent authority nor does it has the jurisdiction to decide the issue. He further states that the impugned order has been passed without recording any reason whatsoever for the basis of its finding/direction, and without affording an opportunity of hearing to the Petitioner which in itself makes it liable to be set aside.
Issue notice.
Mr. Puneet Jain, Advocate on behalf of R-1/IBBI accepts notice. Mr.Pulkit Deora, Advocate on behalf of R-2 accepts notice. Ms. Shiva Lakshmi, Advocate on behalf of R-4/Union of India accepts notice. They pray for and are permitted to file their counter affidavits within four weeks. Rejoinder affidavits, if any, be filed before the next date of hearing.
List on 21st January, 2022.
Till further orders, the impugned order dated 09th March, 2021 is stayed.
The order be uploaded on the website forthwith. Copy of the order be also forwarded to the learned counsel through e-mail.
