The Supreme Court on Friday issued notice to various state bar associations, including Delhi High Court Bar Association (DHCBA) and senior advocate Kevin Gulati, asking why their petitions challenging the government’s notification imposing service tax on senior lawyers should not be transferred to it to avoid multiplicity of proceedings, as sought by the Centre.
Various HCs, while seeking response from the finance ministry and the service tax department, have stayed the relevant provisions of the three notifications dated March 1, 2016 that imposed service tax on senior lawyers with effect from April 1.
To avoid multiple proceedings, the finance ministry has sought transfer of the petitions from HCs of Delhi, Calcutta and Gujarat to the SC. Both DHCBA and Gulati in their pleas before the Delhi HC had alleged that the provisions are ultra vires not only the relevant provisions of the Finance Act, 1994 (as amended) but also Articles 14, 19(1) (g) and 265 of the Constitution.
According to the impugned notification, tax on senior advocates would be levied on forward charge basis (wherein service tax is required to be paid by service provider) and/or reverse charge basis (where service tax is required to be paid by service recipient).
Seeking to strike down the notification, Gulati had contended that it is “unconstitutional” and against the basic principles of the value-added tax regime as it amounts to double taxation. Besides, senior advocates are officers of the court who aid in the administration of justice and that their services would not amount to “taxable services” for levy of service tax.