Shri Hemanta Kumar Sarma vs. The Union Of INDIA And Ors

Facts

The petitioner, Shri Hemanta Kumar Sarma, a practicing advocate since 1991, received a notice dated March 30, 2022, from the respondent authorities (CGST Commissionerate, Guwahati) demanding payment of service tax/GST amounting to Rs. 1,34,293 for the financial year 2014-15, along with a penalty of Rs. 10,000. The petitioner submitted a representation on April 19, 2022, objecting to the demand, citing Notification No. 30/2012-Service Tax dated June 20, 2012, which exempts practicing advocates from paying service tax/GST. He also referred to a previous order dated November 27, 2021, by the Commissioner, CGST, Guwahati, which had set aside similar notices against practicing advocates based on the same notification. Despite this representation, a recovery notice dated June 6, 2024, was issued. The petitioner then filed the present writ petition before the Gauhati High Court.

Held

The Court held that the petitioner's case is clearly covered by Notification No. 30/2012-Service Tax dated June 20, 2012, which exempts practicing advocates from the payment of service tax/GST. The Court found that this fact was brought to the notice of the authorities by the petitioner through his representation. Furthermore, the Court noted that in similar circumstances, the Commissioner of Taxes had interfered with such decisions, reinforcing the petitioner's claim for exemption. Consequently, the Court concluded that the respondent authorities acted without jurisdiction when issuing the notice dated March 30, 2022, and the subsequent recovery notice dated June 6, 2024. The Court found no bar to exercising its power under Article 226 of the Constitution in this case. Therefore, the notice dated March 30, 2022, and the recovery notice dated June 6, 2024, were set aside and quashed. The ratio decidendi is that authorities must act within their jurisdiction and consider relevant exemptions and prior orders, failing which the High Court can intervene under Article 226.

Key Issues

1. Whether the petitioner, as a practicing advocate, is exempted from payment of service tax/GST for the financial year 2014-15 in terms of Notification No. 30/2012-Service Tax dated June 20, 2012? (Question of law) 2. Whether the respondent authorities acted without jurisdiction in issuing the notice dated March 30, 2022, and the subsequent recovery notice dated June 6, 2024, when the petitioner's case was covered by the exemption notification and a prior order of the Commissioner? Petitioner's arguments: The petitioner contended that he is an advocate and, therefore, exempted from paying service tax/GST as per Notification No. 30/2012-Service Tax dated June 20, 2012. He further argued that the respondent authorities acted without jurisdiction by issuing the demand and recovery notices, especially in light of a prior order by the Commissioner, CGST, Guwahati, which had set aside similar demands against practicing advocates based on the same notification. The petitioner relied on the aforementioned notification and the Commissioner's order. Revenue's arguments: The learned standing counsel for the GST submitted that the petitioner's case would indeed be covered by the notification dated June 20, 2012, exempting practicing advocates from GST/Service Tax. However, he also noted that there is a provision for appeal against the Commissioner's order.