Service Tax Not Leviable on Individual Advocate for Legal Services to Law Firm: Bombay HC Quashes Demand & Bank Attachment [Read Order]

The Bombay High Court held that service tax cannot be imposed on an individual advocate for legal services given to a partnership firm of advocates because such services are exempt under Notification No. 25/2012-ST and also covered under reverse charge under Notification No. 30/2012-ST.

Manisha Rajiv Shroff filed a writ petition challenging the Order-in-Original dated 15 March 2023, the recovery notice dated 31 October 2025, and the show cause notice dated 27 October 2021.

The petitioner is an advocate registered since 5 February 2007. The department issued a show cause notice on 27 October 2021 alleging mismatch between her ITR and TDS data and Service Tax returns. The notice was sent to her old address, so she did not receive it. She also did not receive hearing notices. Because of this, an ex-parte order was passed on 15 March 2023 confirming service tax with interest and penalty.

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Later, a recovery notice under Section 87 of the Finance Act was issued on 31 October 2025. A lien was created on her ICICI bank account on 3 November 2025 without informing her. Her Axis Bank account was frozen on 21 December 2025, and she got the recovery notice copy from Axis Bank on 23 December 2025.

The petitioner argued that service tax is not leviable on advocates for such legal services due to the 2012 notifications. She also argued that even otherwise, tax would be under reverse charge and not payable by her. She further argued that natural justice was violated since she never received the notice and hearings.

The Division Bench of Justice G. S. Kulkarni and Justice Aarti Sathe observed that the case was covered by the earlier Bombay High Court decision in Advocate Pooja Patil. The court observed that under the notifications, service tax was not leviable on the individual advocate and the officer had no jurisdiction to pass such an order.

The court allowed the petition and quashed the Order-in-Original, the recovery notice and the show cause notice. No costs were granted.

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