The Orissa High Court has held that advocates are exempted from service tax on income from his legal service.
The bench of Chief Justice Harish Tandon and Justice B.P. Routray has quashed the demand-cum-show cause notice and the order of recovery to the extent it relates to demand of service tax from the income of the Petitioner from his profession as an individual lawyer.
The Petitioner/assessee, who is a practicing advocate at Bhubaneswar, has been served with the notice demanding service tax amounting Rs.2,14,600 for the Financial Year 2015-16 in terms of Section 73 of the Finance Act, 1994. It was followed by the notice of recovery amounting service tax of Rs. 2,14,600 and penalty of Rs.2,34,600 plus interest by the Superintendent (ARC), GST and Central Excise, Bhubaneswar-II Division.
The Department filed their counter stating that the demand-cum-show cause notice was issued to the Petitioner under the provisions of Section 73 of the Finance Act, 1994 for non-payment of service tax for he contravened the provisions under Sections 67, 68, 69 and 70 of the Finance Act read with Finance Rules. The Petitioner did not cooperate with the authorities and as such the adjudication process was completed ex-parte and order has been passed resulting in issuance of recovery order.
The court held that the Petitioner has disclosed his income from house property in the income tax return for the Assessment Years 2018-19 and 2020-21. So it is open for the Department to proceed in respect of the income from house property, if any applicable, to levy service tax in accordance with law.
Case Details
Case Title: Shivananda Ray Versus Principal Commissioner CGST
Case No.: W.P.(C) No.6592 of 2025
Date: 07.04.2025
Counsel For Petitioner: M.M. Patnaik
Counsel For Respondent: T.K. Satapathy
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