Reverse-charge exemption for legal services barred service tax recovery from the advocate, and the proceedings were quashed.

Binding notifications under the Finance Act, 1994 exempt legal services provided by an individual advocate or partnership firm of advocates, and where tax applies under reverse charge the liability falls on the recipient, not the advocate. Proceedings that sought to fasten service tax liability on the advocate, including the show cause notice, order and recovery communication, were contrary to those notifications and lacked jurisdiction. The service tax demand and recovery action were therefore quashed and set aside, and the writ petition was allowed.

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Issues: Whether service tax could be levied and recovered from an advocate for legal services in the face of the exemption and reverse-charge notifications issued under the Finance Act, 1994.

Analysis: The applicable notifications issued under section 93(1) and section 68(2) of the Finance Act, 1994 exempt legal services provided by an individual advocate or partnership firm of advocates and provide that, where tax is payable under the reverse-charge framework, the liability rests on the recipient and not on the advocate as service provider. On that basis, the impugned show cause notice, order, and recovery communication were contrary to the governing notifications and could not be sustained.

Conclusion: The demand and recovery action were unsustainable and the petition succeeded.

Final Conclusion: The service tax proceedings against the advocate were quashed and set aside, with the writ petition allowed.

Ratio Decidendi: Where binding notifications exempt legal services rendered by advocates and allocate tax liability under reverse charge to the recipient, proceedings seeking to fasten service tax liability on the advocate lack jurisdiction and cannot be sustained.

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