The Supreme Court today granted leave in the petitions relating to imposition of service tax on lawyers..A Bench of Justices Kurian Joseph and AM Khanwilkar today said that it will grant leave in the matter. Senior Advocate KK Venugopal appeared for the appellant..The appeal challenges the Bombay High Court order which had dismissed the challenge on imposition of service tax on lawyers..The case is a challenge to 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..It was challenged by various Bar Associations and lawyers in different parts of 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. This was challenged in the Supreme Court by various petitioners, including Bombay Bar Association and one PC Joshi..In its petition, the Bombay Bar 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.”.When the matter came up for hearing in August 2015, the Court had issued notice and stayed the operation of the Bombay High Court decision..Today, when the matter was taken up as item 1, the court proceeded to grant leave and also allowed various transfer petitions seeking transfer of cases on this issue from different high courts to the apex court.
The Supreme Court today granted leave in the petitions relating to imposition of service tax on lawyers..A Bench of Justices Kurian Joseph and AM Khanwilkar today said that it will grant leave in the matter. Senior Advocate KK Venugopal appeared for the appellant..The appeal challenges the Bombay High Court order which had dismissed the challenge on imposition of service tax on lawyers..The case is a challenge to 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..It was challenged by various Bar Associations and lawyers in different parts of 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. This was challenged in the Supreme Court by various petitioners, including Bombay Bar Association and one PC Joshi..In its petition, the Bombay Bar 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.”.When the matter came up for hearing in August 2015, the Court had issued notice and stayed the operation of the Bombay High Court decision..Today, when the matter was taken up as item 1, the court proceeded to grant leave and also allowed various transfer petitions seeking transfer of cases on this issue from different high courts to the apex court.
