Pankaj Khare Vs Union of India (Allahabad High Court)
Introduction: In a significant decision, the Allahabad High Court ruled on the case of Pankaj Khare Vs Union of India, addressing the applicability of GST and service tax for practicing advocates. This case explores the rights and privileges of legal professionals in India, specifically concerning taxation law.
Analysis: Pankaj Khare, a practicing advocate, disputed an order issued by the Deputy Commissioner, CGST & Central Excise Division, Lucknow, assessing him with service tax and levying tax and interest amounting to Rs. 332651/-. The petitioner claimed that as a practicing advocate, he was exempt from service tax under a Notification dated 20.06.2012, rendering the order illegal, arbitrary, and without jurisdiction.
The court took into account an order whereby the respondents themselves dropped the proceedings against the petitioner. The court further observed that numerous members of the Bar had received similar notices. The court expressed concern over the harassment experienced by practicing advocates due to such notices, even when they are exempted from service tax/GST.
The judgment by Allahabad High Court directed the Commissioner, GST to issue clear instructions to the GST Commissionerate in Lucknow to refrain from issuing notices regarding payment of service tax/GST to lawyers providing legal services that fall within the negative list as far as service tax is concerned.
FULL TEXT OF THE JUDGMENT/ORDER OF ALLAHABAD HIGH COURT
1. Heard Sri Yogesh Srivastava, learned counsel for petitioner as well as Sri Sri Dipak Seth, learned counsel for respondents.
2. The petitioner by means of present writ petition has challenged the order dated 22.05.2023 passed by Dy. Commissioner, CGST & Central Excise Div. Lucknow – 1, Lucknow thereby assessing the petitioner with regard to service tax and levying tax and interest to the tune of Rs. 332651/-.
3. Learned counsel for petitioner has assailed the said order stating that the same is illegal and arbitrary and without jurisdiction.
4. He submits that as per Notification dated 20.06.2012 the service tax admitted for any individual advocate is nil for services rendered to any business entity situated in the taxable territory. The petitioner is a practicing advocate and as such he was exempted from service tax.
5. At the very outset, Sri Dipak Seth, learned counsel for respondents has produced before this Court an order dated 06.06.2023 whereby the respondents have themselves dropped the proceedings against the petitioner. The said order is taken on record.
6. During hearing a number of members of the Bar have informed this Court that similar notices have been issued to the various members of the Bar. 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.
7. 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.
7. With the above observations and directions, the writ petition is disposed of.
