Delhi High Court Upholds Interim Order on Service Tax for Senior Advocates, Prevents Department Demands The Delhi High Court, in a judgment by Mr. S. Muralidhar and Ms. Prathiba M. Singh, JJ., clarified that an interim order from 1st April 2016 allowing ...
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Delhi High Court Upholds Interim Order on Service Tax for Senior Advocates, Prevents Department Demands
The Delhi High Court, in a judgment by Mr. S. Muralidhar and Ms. Prathiba M. Singh, JJ., clarified that an interim order from 1st April 2016 allowing service tax collection on a reverse charge basis for fees paid to Senior Advocates was effective immediately and applied universally. The Court held that the Department could not demand service tax for the period from 1st April 2016 to 5th June 2016, as it should have been collected on a reverse charge basis. The interim order was made absolute, preventing the Department from raising service tax demands on Senior Advocates during that period.
Issues: Interpretation of interim order on service tax collection from Senior Advocates for the period from 1st April 2016 to 5th June 2016.
Analysis: The judgment by the Delhi High Court, delivered by Mr. S. Muralidhar and Ms. Prathiba M. Singh, JJ., addressed the issue regarding the collection of service tax from Senior Advocates for the period from 1st April 2016 to 5th June 2016. The Respondents initially insisted on collecting service tax from Senior Advocates on a forward charge basis for this period. However, the Petitioner highlighted that an interim order passed by the Court on 1st April 2016 stayed the impugned notifications but allowed the Respondents to collect service tax on a reverse charge basis for fees payable to Senior Advocates under Notification No. 30/2012-ST dated 20th June 2012.
The Court clarified that the interim order from 1st April 2016, which permitted service tax collection on a reverse charge basis for fees paid to Senior Advocates, became effective immediately and applied to all Senior Advocates. Therefore, the Department could not demand service tax for the period from 1st April 2016 to 5th June 2016. The Court emphasized that there was no prejudice to the Department as service tax should have been collected on a reverse charge basis from 1st April 2016 onwards. If any client failed to pay the corresponding service tax on a reverse charge basis for fees paid to a Senior Advocate, the Department could take action against such clients to recover the service tax as per the law.
Consequently, the Court made the interim order dated 1st April 2016 absolute, preventing the Respondents from raising any service tax demands on Senior Advocates for the period from 1st April 2016 to 5th June 2016. The writ petitions and applications related to this issue were disposed of accordingly, providing clarity on the collection of service tax from Senior Advocates during the specified period.
Full Summary is available for active users!
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
of 
TaxTMI 
