Shivananda Ray Vs Principal Commissioner CGST and Central Excise (Orissa High Court)
In the case of Shivananda Ray vs Principal Commissioner, CGST and Central Excise, the Orissa High Court addressed the validity of a service tax demand issued to a practicing advocate based in Bhubaneswar. The petitioner challenged a notice dated 15th April 2021, demanding service tax of ₹2,14,600 for the financial year 2015–16, followed by a recovery notice dated 28th January 2025, which included additional penalties and interest. The petitioner contended that, as an individual legal practitioner, he was exempt from the levy of service tax for legal services under the applicable law.
The Department argued that the demand was raised due to the petitioner’s non-compliance with several provisions of the Finance Act, 1994 and stated that the adjudication was completed ex-parte after the petitioner failed to cooperate. However, the Court referred to a previous ruling in WP(C) No. 27727 of 2020, which clarified that legal services provided by individual advocates or law firms to non-business entities or to business entities with a turnover of less than ₹10 lakhs are exempt from service tax. The Court had earlier instructed GST authorities to avoid issuing tax notices to practicing lawyers who fall within the exemption criteria.
