Delhi High Court stays service tax on senior counsel, follows Gujarat HC

Service Tax serves the nation

The Delhi High Court today issued notice to the Union Government over a plea moved by the Delhi High Court Bar Association that had challenged imposition of service tax on Senior Advocates.

A Division Bench of Justices Dr. S. Muralidhar and RK Gauba also stayed the relevant provisions imposing service tax to ‘maintain consistency’ with a recent Gujarat High Court order of March 30 that had also directed an ad-interim stay of Notification No. 18/2016-ST and Notification No. 9/2016–ST with respect to the same issue.

As per the impugned notification, Senior Advocates are liable to pay service tax from today onwards. This tax would be charged on a forward charge basis and/or reverse charge basis. The Association focused its plea on the point that services provided by a Senior Advocate could not be deemed as ‘service’ for the purpose of taxation.

The DHBA’s petition further stated that a Senior Advocate was an officer of the Court and assisted in the administration of justice.

“Impugned notifications are also liable to be struck down on the ground that it results in double taxation and the same is against the basic principles of value added tax regime…

….the impugned notifications achieve no purpose but causing tremendous inconvenience and hardship to not only Senior Avocates who are the apparent target of the levy, but to all other advocates and their clients who may choose to avail the services of any Senior Advocate.”

A bevy of senior counsel including AS Chandiok and AK Ganguli appeared for the DHCBA while Akshay Makhija accepted notice for the Centre. Other office bearers of the DHCBA, including President Rajeev Khosla and Secretary Abhijat, were also present for the hearing.