Delhi HC decides to stay the Service Tax levied by Central Government Notification

High court of Delhi

New Delhi: Yesterday, on first day of April, the honourable High Court of Delhi has passed an interim order and stayed the notification which was recently brought into effect by the Central Government, where 14.5 per cent’s rate was levied as service tax against the Senior Advocates. Thus, now these senior advocates will be outside the service tax net for temporary period.

It was seen that the current decision is made in connection with the petition, which was preferred by the High Court Bar Association- HCBA which has challenged the said notification before the High Court of Delhi. The concerned court’s Division bench comprising of Justice- S. Muralidhar and Justice- R. K. Gauba, which has stayed temporarily by its interim order, the said banning notification for maintaining the consistency with the interim order of the High court of Gujarat High Court, which was passed on Wednesday, 30th day of March. In that order of the high court of Gujarat, the operation of the said decision of the Government was put to hold.

It was also seen that the concerned bench has of the high Court has also issued the novice against the Central Government, where the court asked the Centre to file its response before the 27th day of September, this year, in connection with the said petition of Bar Association.

The petition contains the challenge against the said notification of the Centre, on the ground that the action of the government imposing such service tax, had resulted in “double taxation” and as such it is against the basic principles of the value added tax regime.

As per the Secretary of the High Court Bar Association Abhijat who is also representing the petitioners in the case, the Service tax on legal services was earlier imposed on the reverse charge basis, and this disputed notification of the Central Government had provided for its imposition on the forward charge basis from 1st April, which is required to be paid by the Senior Advocates.

Thus,  now, the court has issued notice against the government, and also decided to impose its stay against the impugned notification, for certain period.

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