Lawyers not to be harassed by GST notice, high court warns government again for issuing notice to a lawyer for the GST collection- Prime Legal

IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No.277220 Devi Prasad Tripathy The Principal Commissioner CGST and Central Excise Bhubaneswar and others versus in person Opposite Parties Mr. P. K. Parhi Assistant Solicitor General of India CORAM: THE CHIEF JUSTICE JUSTICE B. P. ROUTRAY Order No. 04. 1. The Counter affidavit sworn to by the Principal Commissioner GST and Central Excise Bhubaneswar Commissionerate on behalf of Opposite Party Nos.1 to 7 is produced in Court today which is taken on record. 2. It is stated in the said affidavit that “after receiving information from Devi Prasad Tripathy having PAN as being an individual advocate practicing in the Hon’ble High Court of Odisha” further proceedings against him are dropped. 3. What the Court is concerned about is the deponent insisting that the Petitioner should have submitted “documentary evidence to prove his claim that he is a practicing individual lawyer and does not come under the provision of GST or service tax.” 4. A reference is made to a Notification dated 20th June 2012 in terms of which service tax liability of an individual advocate is Nil for legal services rendered to any of business entities located in the taxable territory. However even for this the Department appears to insist that the burden to prove lies on the Petitioner. The counter affidavit filed acknowledges that a similar notice was issued to the Petitioner in 2017 to which he replied pointing out how he was not liable to pay any service tax. 5. Mr. P. K. Parhi learned Assistant Solicitor General of India has fairly admitted that no notice in the first instance ought to have been issued to the Petitioner who is a practising advocate. However when specifically asked whether the clear instructions have been issued by the Department to all the officers involved in the enforcement of the GST regime that practising advocates should not be issued notices he sought time for instructions. 6. During the hearing certain other advocates present in the Court stated that they too have received such notices. It appears that despite knowing fully well that advocates are not liable to pay service tax or GST notices continue to be issued to them by the GST Commissionerate. 7. The Court expresses its concern that practising advocates should not have to face harassment on account of the Department issuing notices calling upon them to pay service tax GST when they are exempted from doing so and in the process also having to prove they are practising advocates. The Commissioner GST is directed to issue clear instructions to all the officers in the GST Commissionerates in Odisha that no notice demanding payment of service tax GST will be issued to lawyers rendering legal services and falling in the negative list as far as GST regime is concerned. Copies of such instructions be placed before the Court on the next date. 8. List on 22nd April 2021. Dr. S. Muralidhar) Chief Justice B.P. Routray ) M. Panda 

Summary: Lawyers must be exempted from paying tax and must not be harassed by GST notice. Time and again the court stressed upon the practicing lawyers that they must not be sent any notice to pay tax. This auspicious order dated 31st March 2021 was passed by the Orissa High court in the matter of Devi Prasad Tripathy v. The Principal Commissioner CGST and Central Excise Bhubaneswar and others [W.P.(C) No.27727 of 2020] by THE CHIEF JUSTICE JUSTICE B. P. ROUTRAY. Directions were laid to the Commissioner GST to issue crystal clear instructions to all the officers in the GST Commission rates in the state, not to issue any notice demanding payment of service tax/GST to practicing lawyers. The petition was filed by the practicing lawyer- Mr. Devi Prasad against the respondents who proclaimed via affidavit that the lawyer should have submitted documentary evidence to prove his claim that he was a practicing individual lawyer and does not come under the provision of GST or service tax. The affidavit by the respondent further stated that “after receiving information from Devi Prasad Tripathy having PAN as being an individual advocate practicing in the Hon’ble High Court of Odisha”. A reference was made to a Notification dated 20th June 2012, in terms of which service tax liability of an individual advocate was Nil for legal services rendered to any of business entities located in the taxable territory. However, even for this, the Department appeared to insist that “the burden to prove it lies on the Petitioner. The counter-affidavit filed acknowledges that a similar notice was issued to the Petitioner in 2017 to which he replied, pointing out how he was not liable to pay any service tax.” Further, Mr. P. K. Parhi, learned Assistant Solicitor General of India, fairly admitted that “no notice in the first instance ought to have been issued to the Petitioner, who is a practicing advocate. However, when specifically asked whether the clear instructions have been issued by the Department to all the officers involved in the enforcement of the GST regime that practicing advocates should not be issued notices, he sought time for instructions.” Also, the court after inquiring other lawyers who were present in the court about the same got to know that “they too have received such notices. It appears that despite knowing fully well that advocates are not liable to pay service tax or GST, notices continue to be issued to them by the GST Commissionerate.”