The Jharkhand High Court has quashed a demand notice issued by the tax authorities to a Senior Advocate seeking payment of service tax on legal services provided by him to a legal firm.
While allowing the petition filed by Madhu Sudan Mittal, the division bench comprising of Chief Justice Ravi Ranjan and Justice Sujit Narayan Prasad observed that, the demand notice issued by the authority concerned for payment of service tax on legal services provided by a Senior Advocate for the period from 01.04.2016 to 05.06.2016 is held to be not sustainable in the eyes of law.
However, did not allow the prayer seeking to quash Notification No.18/2016-ST dated 1.3.2016 and Notification No. 9/2016-ST dated 1.3.2016 issued by the tax authorities to the extent that it sought to recover service tax directly from Senior Advocates for the legal services provided by them.
The Court also observed that if any amendment is being made by way of substitution, it will relate back to the original document and therefore, the Court had to decide as to whether the amendments which have been brought by virtue of Notification No. 18/2016-ST dated 01.03.2016 and Notification No.34/2016-ST dated 06.06.2016 are by way of substitution and if yes, what would be its consequence?.
The Court noted that the provision as contained in Notification No.30/2012 dated 20.06.2012 has been amended by virtue of Notification No.18/2016-ST dated 01.03.2016 by way of substitution and thereafter, the said notification was further amended by way of substitution vide Notification No.34/2016- ST dated 06.06.2016.
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