Adv. Pooja Patil v. The Deputy Commissioner, CGST and CX Division VI, Raigad Commissionerate & Ors.

Introduction

The case of Adv. Pooja Patil v. The Deputy Commissioner, CGST and CX Division VI, Raigad Commissionerate & Ors., involves a petition filed under Article 226 of the Constitution of India challenging an Order-in-Original dated 26^th October 2023, passed by the Deputy Commissioner, CGST and C. Excise, Raigad, demanding an amount of Rs. 35,82,298/- as service tax from the petitioner under the provisions of Section 73(1) of the Finance Act, 1994, read with Section 174 of the Central Goods and Service Tax Act, 2017. The petitioner, an advocate, contends that the order lacks jurisdiction and alleges procedural illegalities and a breach of natural justice. The Bombay High Court held that the legal services provided by an individual Advocate or a partnership firm of Advocates are exempted from the levy of service tax.

Case Facts

• The petitioner, an advocate practicing in the court, received an email on 5^th October 2023, summoning her for a hearing scheduled on 17^th October 2023.
• In response, the petitioner’s representative, a Chartered Accountant, attended the hearing. 
• Following this, on 18^th October 2023, the petitioner addressed a letter to the Designated Officer, pointing out the non-receipt of a show-cause notice dated 24^th December 2020.
• The petitioner emphasized that neither Service Tax nor Goods and Services Tax (“GST”) were applicable to advocates due to Notifications No.25/2012 and No.30/2012 exempting individual advocates from service tax.
• The petitioner contended that the email merely referenced the show-cause notice, which was never received.
• The petitioner’s representative was also not provided with a copy of the show-cause notice, and the website only mentioned the personal hearing letter.
• Despite these procedural irregularities, the proceedings were not dropped, and on 9^th January 2024, the petitioner received the impugned order dated 26^th October 2023, demanding Rs. 35,82,298/- as service tax, along with interest and penalties.
• Against this backdrop, the petitioner filed the present petition, asserting a lack of jurisdiction on the part of Respondent No.1 and highlighting several procedural irregularities, amounting to a breach of natural justice in the issuance of the impugned order.

Arguments Advanced

Petitioner

• The impugned order lacks jurisdiction.
• A show-cause notice was not received.
• Notifications exempt advocates from service tax, as per the Finance Act, 1994.

Respondent

• The respondent does not dispute the relevance of Notifications No.25/2012 and No.30/2012 exempting individual advocates from service tax.

Court’s Analysis

• The Court, upon careful examination, observes a significant lapse in procedural fairness. The petitioner was denied a proper opportunity for a hearing before the issuance of the impugned Order-in-Original. This failure to adhere to the principles of natural justice constitutes a substantial flaw in the proceedings.
• The Designated Officer failed to address the fundamental challenge raised by the petitioner regarding jurisdiction. Despite being apprised of the notifications exempting individual advocates from service tax, the Officer proceeded with the order, raising concerns about the propriety and jurisdictional authority.
• The Court takes cognizance of Notifications No.25/2012 and No.30/2012, which unequivocally exempt legal services provided by individual advocates from service tax. The failure of the Designated Officer to consider these binding notifications raises serious questions about the legality and validity of the impugned order.
• The Court refers to a Co-ordinate Bench decision in a similar context (Writ Petition (L) No.25269 of 2023 – Ish Kiran Jain Vs. The Assistant Commissioner & Ors), where the Court had intervened in favor of an advocate facing analogous circumstances.
• The Court expresses concern that the Designated Officer did not appropriately consider the jurisdictional challenge raised by the petitioner. The Officer’s failure to recognize the clear exemptions specified in the notifications leads to the conclusion that the impugned order was passed without due application of relevant legal provisions.

Conclusion

The Court decisively quashes the impugned Order-in-Original dated 26th October, 2023, citing a clear breach of natural justice due to the petitioner’s denied hearing opportunity. The Designated Officer’s failure to address the petitioner’s jurisdictional challenge, coupled with an oversight of binding exemption notifications (No.25/2012 and No.30/2012) for individual advocates, renders the order legally unsound.