P.C. Joshi Vs UOI (Bombay High Court)
|Court:||Bombay High Court|
|Coram:||A.A.Sayed J, S.C. Dharmadhikari J|
|Section:||Service Tax Act|
|Catch words:||Advocates, Constitution, Service Tax|
|Date:||December 15, 2014 (Date of pronouncement)|
|Date:||December 17, 2014 (Date of publication)|
|File:||Click here to download the file in PDF format|
|Article 19(1)(g): Levy of service-tax on Advocates is constitutional|
A Writ Petition was filed to challenge the levy of Service Tax on Advocates. It was claimed that an advocate renders services which cannot be said to be commercial or business like. They cannot be equated with the service providers mentioned in the Finance Act 1994. It was also contended that advocacy is not a business but a profession and a noble one. An advocate is a part and parcel of the administration of justice and which is a sovereign or regal function and hence providing for a Service Tax on advocates would mean that their services will no longer be available or accessible to those seeking justice from a Court of law. That would defeat the constitutional guarantee of free, fair and impartial justice.
HELD by the High Court dismissing the Petition:
(i) The legislature has neither interfered with the role and function of an advocate nor has it made any inroad and interference in the constitutional guarantee of justice to all. The services provided to a individual client by a individual advocate continues to be exempted from the purview of the Finance Act and consequently Service Tax but when an individual advocate provides service or agrees to provide services to any business entity located in the taxable territory, then, he is included and liable to pay Service Tax. The classification between those who can afford professional legal services and are ready to pay the fees or charges demanded without seeking any reduction or concession and those who cannot pay legal fees but can at best bear meager expenses has been made. This classification has a reasonable nexus with the object sought to be achieved.
(ii) The economic realities are that even, legal services are rendered in an organized manner. When advocates group or organize themselves by making huge investments in acquiring immovable properties for professional work, heavy overheads, in the form of clerical and support staff, with facilities of cabins or rooms, then, legal services are rendered to organized groups or business entities predominantly. These persons can very well pay the fees and charges without any demur or complaint;
(iii) What holds good for chartered accountants and architects must equally apply to other professionals such as advocates, and who too are well conscious of their status.
Also Read: Supreme Court Stay on Advocates Service Tax