Delhi High Court today (Friday – 29.4.2011) stayed the Notification levying service tax on representational services rendered by individual lawyers to business entities, till further orders and fixed the next date of hearing on 23.5.2011, with directions to UOI to file counter in a fortnight.
The stay was given in response to Writ Petition filed in the Delhi High Court bearing WP No. 2792 of 2011 by Delhi Bar Association to challenge the levy of service-tax on “Legal Consultancy Services”.
The Court also frowned upon the unusually short transition period given in the notification dated 27th April, 2011, making it effective from 1.5.2011, hardly providing sufficient time to switch over to new accounting systems and to seek registration.
The case was ably argued by President of Delhi Bar Association & ASG Senior Advocate Mr. Chandiok for the lawyers community, and by Sr. Counsel Mr. Ganesh who has emerged as the focal point of resistance against irrational levy of service tax elsewhere, on a petition filed by a team of two dynamic young lawyers Sumit Batra and Ruchir Bhatia.
Rakesh Chitkara, Advocate,
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Reports From PTI
In a major relief to lawyers, the Delhi High Court today stayed the operation of a central government”s notification to levy service tax from practising advocates.
“The notification is stayed,” a bench comprising Chief Justice Dipak Misra and Sanjiv Khanna said on a petition by Delhi High Court Bar Association (DHCBA) challenging the Centre”s notification.
Admitting the petition of DHCBA, filed by its secretary Kirti Uppal, the bench asked the union government and the Central Board of Excise and Customs to file its response within two weeks. The next hearing has been fixed for May 23.
The government had on April 25 notified the Legal Practitioners Bill, 2010, for imposing 10 per cent tax on the fee charged by lawyers for their legal services. The bill was to be implemented from May 1.
Lawyers in the Delhi High Court and all the six Delhi districts courts had observed a day-long strike on March 24, when the bill was passed in Parliament, to protest the Finance Bill proposing levy of 10 per cent tax on the fee charged by them for rendering legal services to their clients.
Delhi Bar Association President Rajiv Khosla had said lawyers are against imposition of service tax on their profession and on services rendered by them to the firms and companies, besides the services given by legal firms to individuals