Allahabad HC Directs GST Commissioner To Cease Issuing Service Tax And GST Notices To Lawyers

The Allahabad High Court has directed the GST Commissionerate in Lucknow to provide clear directives to prevent the issuance of service tax or GST notices to practicing lawyers for legal services in Pankaj Khare v UOI.

A bench of Justice Jyotsna Sharma and Justice Alok Mathur expressed concern over other lawyers reporting similar notices being sent to them.

“The Commissioner, GST is directed to issue clear direction to the GST Commissionerate in Lucknow that no notices regarding payment of service tax /GST is issued to the lawyers rendering legal service falling in the negative list so far as service tax is concerned,” the bench stated.

In response to a petition filed by lawyer Pankaj Khare, the bench passed the order concerning a challenge to the May 22, 2023 order imposed by the Deputy Commissioner, CGST and Central Excise Division, Lucknow. The order demanded a service tax payment of ₹33,2651 from Khare. The petitioner argued that the order was unlawful, arbitrary, and lacked jurisdiction.

Additionally, the petitioner emphasized a notification dated June 20, 2012, which stated that individual advocates were exempt from paying service tax for services provided to any business entity located in a taxable territory.

It was contended before the Court that the petitioner, as a practicing advocate, is exempt from paying service tax.

On the other hand, the government authorities’ counsel informed the bench that the proceedings against the petitioner had been terminated as per the order dated June 6, 2023.

Despite this development, the Court expressed concern about the harassment faced by practicing lawyers due to the issuance of tax notices.

Consequently, the bench concluded the plea by instructing the relevant authorities to issue explicit directives prohibiting the issuance of such notices to lawyers.

The bench expressed its concern, stating, “that practicing advocates should not have to face harassment on account of the department issuing notices and calling upon them to pay service tax/GST when they are exempted from doing so and in the process also calling them to prove that they are practicing advocates.”