The Supreme Court today stayed the Bombay High Court’s dismissal of a challenge to the levy of service tax on lawyers. The stay was ordered in an appeal filed by the Bombay Bar Association..Senior Advocate KK Venugopal appeared for the petitioner before Chief Justice HL Dattu and Justices Arun Mishra and Amitava Roy. The Bench tagged the matter with similar petitions pending before the Supreme Court. The Court also stayed the Bombay High Court order of December 15, 2014..The case has its genesis in sub-clause (zzzzm) of clause (105) to Section 65 of the Finance Act, 1994 which was inserted by the Finance Act, 2011. The said section seeks to levy service tax on fees paid by clients to lawyers. The said section was challenged by various Bar Associations and lawyers in different High Courts across the country. High Courts including the Delhi High Court stayed the operation of the impugned Section while keeping the matter pending..However, during the operation of stay in other States, petitions filed in Bombay High Court were dismissed in December 2014. One of the petitioners before the Bombay High Court, PC Joshi, had already challenged the order of Bombay High Court and the Supreme Court had issued notice in that case. This present petition has been filed by Bombay Bar Association..In its petition, a copy of which is with Bar & Bench, the Association has raised, inter alia, the following questions of law:.“(a) Whether the relationship between an advocate and a litigant is that of a service provider and a service recipient or whether the relationship is that of a representative and a litigant?.(b) Whether the High Court ought to have considered that since the Finance Act, 2011 is a central legislation, thus the levy being in the nature of a federal tax, the incidence of taxation cannot vary in different jurisdictions and thus, pending the adjudication of the impugned levy in various High Courts, and stay orders having been granted therein, the High Court ought not have proceeded to decide the issue in such a hasty manner..…….(e) Whether the term business entity used in sub –clause (1) of clause (zzzm) can be said to include within its fold any firm or association that provides legal services of any nature considering the legal profession was always an honourable profession which is the antithesis of a business..……..(h) Whether the judgment affirming the levy of service of tax on the transaction of rendition of assistance to the court for a proper and correct decision on a question of law and fact is incorrect/ wrong as the transaction of rendering assistance to the court of law as an officer of the court does not amount to service at all?.(j) Whether the impugned judgment is correct and legal in as much as levy of service tax on the provision of assistance to the court would hit the provision of justice either by the individual or a business entity as both are indisputably guaranteed under right to justice in terms of Article 21 read with Article 39A of the Constitution.”.The court after a brief hearing tagged the matter with other petitions pending before the Supreme Court. The Court also stayed the Bombay High Court order of December 15, 2014..Image taken from here.
The Supreme Court today stayed the Bombay High Court’s dismissal of a challenge to the levy of service tax on lawyers. The stay was ordered in an appeal filed by the Bombay Bar Association..Senior Advocate KK Venugopal appeared for the petitioner before Chief Justice HL Dattu and Justices Arun Mishra and Amitava Roy. The Bench tagged the matter with similar petitions pending before the Supreme Court. The Court also stayed the Bombay High Court order of December 15, 2014..The case has its genesis in sub-clause (zzzzm) of clause (105) to Section 65 of the Finance Act, 1994 which was inserted by the Finance Act, 2011. The said section seeks to levy service tax on fees paid by clients to lawyers. The said section was challenged by various Bar Associations and lawyers in different High Courts across the country. High Courts including the Delhi High Court stayed the operation of the impugned Section while keeping the matter pending..However, during the operation of stay in other States, petitions filed in Bombay High Court were dismissed in December 2014. One of the petitioners before the Bombay High Court, PC Joshi, had already challenged the order of Bombay High Court and the Supreme Court had issued notice in that case. This present petition has been filed by Bombay Bar Association..In its petition, a copy of which is with Bar & Bench, the Association has raised, inter alia, the following questions of law:.“(a) Whether the relationship between an advocate and a litigant is that of a service provider and a service recipient or whether the relationship is that of a representative and a litigant?.(b) Whether the High Court ought to have considered that since the Finance Act, 2011 is a central legislation, thus the levy being in the nature of a federal tax, the incidence of taxation cannot vary in different jurisdictions and thus, pending the adjudication of the impugned levy in various High Courts, and stay orders having been granted therein, the High Court ought not have proceeded to decide the issue in such a hasty manner..…….(e) Whether the term business entity used in sub –clause (1) of clause (zzzm) can be said to include within its fold any firm or association that provides legal services of any nature considering the legal profession was always an honourable profession which is the antithesis of a business..……..(h) Whether the judgment affirming the levy of service of tax on the transaction of rendition of assistance to the court for a proper and correct decision on a question of law and fact is incorrect/ wrong as the transaction of rendering assistance to the court of law as an officer of the court does not amount to service at all?.(j) Whether the impugned judgment is correct and legal in as much as levy of service tax on the provision of assistance to the court would hit the provision of justice either by the individual or a business entity as both are indisputably guaranteed under right to justice in terms of Article 21 read with Article 39A of the Constitution.”.The court after a brief hearing tagged the matter with other petitions pending before the Supreme Court. The Court also stayed the Bombay High Court order of December 15, 2014..Image taken from here.