Writ Petition challenging service tax on lawyers

Ultimtely the impugned levy of service tax will be held to be valid.  It is only interim drama being enacted and which we witness.

is it possible to collect service tax from lawyers?

I Admire the Cause taken up by the Delhi Bar Association.

Dear Mr. Aravinthan,

Do you mean to say that it will be difficult to collect service tax crom lawyers?  Certainly not.

From 1.5.2011 what is sought to be taxed by way of service tax is only when any Advocate renders any representational services to any business entity, before any court, tribunal or authority.

The business entity is expected to pay for the services only through cheque.  Otherwise its expenses paid through cash will not be allowed as business expenses by the Income Tax Department. 

Thus if it pays through cheque, naturally it has to get an invoice from the lawyer.  The lawyer while raising the invoice has to include the service tax element.  The company will have to naturally pay the fees including the service tax element.

Having received the service tax component from the company/business entity, the lawyer cannot keep it with himself without remitting the same to the Government.  If does not remit, then he will expose himself to all the penal consequences.  Therefore, where is the difficulty to collect service tax crom lawyers?  More over the lawyers have to get themselves registered with the service tax department as well.

The Bar Asso has my wishes.This is not a mere imposition of tax on a proffession,but it is rather a tax on the administration of justice.The Governmet does not want an independent judiciary,that s why its officers are always busy cutting the wings of judiciary.And these officials are now asking for a LEGAL RANSOM MONEY in the form of the so called service tax.sh*t.In India everybody is under the service tax except only those who actually do a "service".One day these people will impose service tax on Morgues and Cremetoriums.Beware of this service tax.The Finance Act,1994 empowers the central government to take EXTORTION MONEY LAWFULLY with penalty and interest theron.Bullsh*t.The Bar Council of India must call a meeting and then resolve to fight against this OFFICIAL EXTORTION.This notification must be struck down and thrown into the trash cane.Nowhere in the world this kind of a tax ever been imposed on lawyers.Do we live in a democratic country or in a dictatorship state? sometimes I really suspect.

Mr. John is only creating a hyperbole.  Service tax is not being imposed on any judiciary.  It is a fallacy being created by the opponents of service tax.  By imposing service tax neither the independence of judiciary is sought to be impinged in any way.  The arguments are irrational, not based on any legality but on emotional appeal. 

A poor man first open his account and then pay to his lawyer then the lawyer go to bank and sumiit the cheque and then after ten days he collect the amount and then file there engagement latter before the court !

these stapes will become after services tax.

now the justice is not delaying?

good stap by  district bar aasociation high court!

hatsoff!

Please inform whether it is binding on Law firms only or on Individual lawers too?

With due Regards.....

With reference to your reply,I acknowledge your wisdom and rational.

But we have to remember,we are imposing a Service Tax on Lawyers in India,which is a country tops in the corruption indices worldwide and Administration here is does not adthere to strict standards of proffessionalism like US Internal Revenue Service.

Without any prejudice to the matter pending before the hon'ble High Court,if in case the High Court lifts a stay or favours the revenue,the next day the Excise and Service Tax officials start sommuning those lawyers who are fighiting against their departments at various forums.The next people to get papers would be the pro bono personalities fighting for Fundamental Rights and forcing the appearances of the IAS officers before the Court.Many lawyers have turned themselves as RTI activists,so,the Administration wants to put a brake on the RTI crusades and service tax is a nice tool given in their hands.So,first of all,there is a conflict of interest in imposing the service tax on lawyers,where the moral standards of Administration are very low.

It would be nice if the Collection of Service Tax is entrusted within the hands of the Judicial Officers insted of the department officials.The Customs department is known for making quick bucks.And even the smartest lawyers may not know the latest corrupt practices and loopholes adopted by the Custome Inspectors and House Agents.

Thirdly,by imposing the service tax,the government wants to make justice dearer.It is the sinister agenda of the government to discourage people and corporates to access the judicial system and change them.There is also a hidden agenda to discourage litigations and lawyers.Because lawyers ask tough questions in the Court and out English dominant bureaucracy doesn't like being questined.Yes,this is done in vendatta against the whole community of lawyers.

Fourthly,and most logical and rational argument,the government wants to discourage lawyers from accessing the public life.How many learned lawyers have succeded in India to become Prime Ministers and Chief Ministers ? And see in the United States...how many lawyers have gone to become the President? In India the ex-bureaucrats become the political leaders,who have never cared for Common People in their earlier Career and they become members of the houses.By imposing service tax,the govt also wants to cut the lawyers share in public life.The officers dont like a lawyer becoming their minister in coming days,because he knows the law.He will ask question before signing a note.and our lethargic bereaucracy doesnt want to be answerable to its own minister..They want dictatorship.So,this service tax has many mala fide intentions.

This Service tax has been imposed to ensure that corrupt practices are never chllanged by the lawyers and the system doesnt change.Lawyers keep mum or face a summon from a Commissioner or even go to jails,yes,these people will put lawyers behind bars every now and then.

The Supreme Court has said that a lawyer is an integral part of the judicial system and when in the robe,he is a court official.And independence of the judiciary is a sine qua non of the Constitutional Democracy.

Coming to your argument one by one:

1. If India  tops in the corruption indices worldwide and Administration here is does not adthere to strict standards of proffessionalism like US Internal Revenue Service, and because of that Service Tax is not to be levied on lawyers, then should not the same yardstick apply equally to other professionals also?  Similarly,  if service tax is not to be levied because India is a corruption topping country, should not the same corruption topping be the ground for not levying any tax be it excise duty, value added tax etc., on manufacturers, traders etc.?    If India tops on corruption and because of that service tax should not be levied, by extending the argument no court fee should be levied, no stamp duty should be levied.  THEREFORE, WHETHER INDIA TOPS IN CORRUPTION OR NOT CANNOT BE A GROUND FOR OPPOSING SERVICE TAX ON LAWYERS!

2.  You say that "if in case the High Court lifts a stay or favours the revenue, the next day the Excise and Service Tax officials start sommoning those lawyers who are fighiting against their departments at various forums. "  IF THE LAWYER CONCERNED HAS PAID HIS SERVICE TAX ACCORDING TO LAW, HE WILL NOT BE SUMMONED.  EVEN IF HE IS SUMMONED, THE LAWYER IS CAPABLE ENOUGH TO DEFEND HIMSELF.  SO THIS IS ONLY A LAME ARGUMENT AND WITHOUT SUBSTANCE.

3.  "The next people to get papers would be the pro bono personalities fighting for Fundamental Rights and forcing the appearances of the IAS officers before the Court."  YOU SHOULD KNOW THAT SERVICE TAX IS LEVIABLE, ONLY WHEN CONSIDERATION IS RECEIVED FOR SERVICE AND THAT TOO ONLY WHEN THE THRESHOLD LIMIT IS CROSSED - NOT OTHERWISE.  SINCE PRO BONO SERVICE IS WITHOUT CONSIDERATION THE QUESTION OF ASKING THE PRO BONO LAWYERS WOULD NOT AT ALL ARISE.  THIS ARGUMENT YOU ARE ADVANCING WITHOUT EVEN KNOWING THE EXACT LEGAL POSITION.

4.  "Many lawyers have turned themselves as RTI activists,so,the Administration wants to put a brake on the RTI crusades and service tax is a nice tool given in their hands. So,first of all,there is a conflict of interest in imposing the service tax on lawyers, where the moral standards of Administration are very low."   NO LAWYER (WHETHER HE IS AN RTI ACTIVIST OR NOT IS IMMATERIAL) IS TO PAY THE SERVICE TAX FROM HIS POCKET.  HE HAS TO CHARGE FROM THE CLIENT AND PAY.  THEREFORE, TO SAY THAT BY IMPOSING THE SERVICE TAX, THE ADMINISTRATION IS PUTTING A BRAKE ON THE RTI CRUSADERS IS THE MOST SUB-STANDARD ARGUMENT.   IT IS THE GOVERNMENT THAT IS LEVYING THE TAX AND NOT THE ADMINISTRATION.  THIS MUCH DIFFERENCE WE SHOULD UNDERSTAND. 

 5. "It would be nice if the Collection of Service Tax is entrusted within the hands of the Judicial Officers insted of the department officials.The Customs department is known for making quick bucks.And even the smartest lawyers may not know the latest corrupt practices and loopholes adopted by the Custome Inspectors and House Agents."  YOU ARE SAYING AS THOUGH ONLY THE JUDICIAL OFFICERS ARE ANGELS AND PANECEA FOR ALL THE ILLS IN THE COUNTRY.  I CANNOT BUT LAUGH AT SUCH A STAND, ESPECIALLY WHEN WE KNOW THERE IS EQUAL CORRUPTION IN THE JUDICIARY - SOME EXAMPLES - NIRMAL YADAV'S CASE, DINAKARAN'S CASE, SUMIT MUKERJEE'S CASE, PF SCANDAL CASE ETC.

6.  "Thirdly,by imposing the service tax, the government wants to make justice dearer. It is the sinister agenda of the government to discourage people and corporates to access the judicial system and change them. There is also a hidden agenda to discourage litigations and lawyers. Because lawyers ask tough questions in the Court and out English dominant bureaucracy doesn't like being questined. Yes,this is done in vendatta against the whole community of lawyers."  YES, ALL THE LAWYERS ARE DOING FREE SERVICE TO THE LITIGANTS! WITH THE KIND OF HEFTY FEES BEING TAKEN BY THE LAWYERS, ONE CANNOT BUT LAUGH THAT SUCH UNTENABLE CHARGES LIKE ' THE GOVERNMENT WANTS TO MAKE JUSTICE DEARER' ETC., IS BEING MADE. 

9.  :Fourthly,and most logical and rational argument,the government wants to discourage lawyers from accessing the public life.How many learned lawyers have succeded in India to become Prime Ministers and Chief Ministers ? And see in the United States...how many lawyers have gone to become the President? In India the ex-bureaucrats become the political leaders,who have never cared for Common People in their earlier Career and they become members of the houses.By imposing service tax,the govt also wants to cut the lawyers share in public life.The officers dont like a lawyer becoming their minister in coming days,because he knows the law.He will ask question before signing a note.and our lethargic bereaucracy doesnt want to be answerable to its own minister..They want dictatorship.So,this service tax has many mala fide intentions."   LEAVE ALONE ANY LAWYER BECOMING P.M., PRESIDENT ETC., JUST BECAUSE YOU HAVE NOT BECOME A SECRETARY OR PRESIDENT OF YOUR BAR ASSOCIATION OR BAR COUNCIL, IT CANNOT BE SAID THAT SERVICE TAX SHOULD NOT BE LEVIED.   NO SUBSTANCE AT ALL.

10. "This Service tax has been imposed to ensure that corrupt practices are never chllanged by the lawyers and the system doesnt change.Lawyers keep mum or face a summon from a Commissioner or even go to jails,yes,these people will put lawyers behind bars every now and then."    AGAIN AN UNSUBSTANTIATED AND WILD ALLEGATION.

11.   " The Supreme Court has said that a lawyer is an integral part of the judicial system and when in the robe, he is a court official. And independence of the judiciary is a sine qua non of the Constitutional Democracy."   YOU ARE QUOTING THINGS COMPLETELY OUT OF CONTEXT.  IIF INCOME TAX IS CHARGED ON THE LAWYER, WILL INDEPENDENCE OF JUDICIARY BE LOST.  SIMILARLY HOW INDEPENDENCE OF JUDICIARY WOULD BE LOST IF SERVICE TAX IS LEVIED.?

YOU SHOULD ALSO REMEMBER, THAT NONE OF THE ABOVE ARGUMENTS FIND A PLACE IN THE WRIT PETITION FILED BEFORE THE HIGH COURT, BECAUSE THE PERSONS WHO FILED THE WRIT PETITION DEFINITELY KNOW THAT THE ABOVE ARE ONLY HALLOW GROUNDS. 

Indirectly this tax will be passed on to clients of lawyers, so I do think that every seeker of justice will pay more and why this extra burden, in addition to a Judiciary that is clearly dysfunctional and inefficient.

First I have to acknowledge that Johns view are correct. Secondly if a point is not made in the Petition, I feel we should assit the Bar rather than pointing out flaws.

Thirdly, and most importantly, we are lawyers in our own cause as also for the cause of general public. It is our bounden duty to show how the charging is not for public purpose.

Lastly we have to understand that if such be the position, litigants will stop taking advise and start litigating in person. And you all will agree that there is no necesity of lawyer in any cause.

Next if this fails, people would start there our parallel judicial system as the present one is {a} lithargic {b} costly {c} unpredictable. And to add to this if the litigants are to be taxed; that is end of the matter.

Therefore the Admistration of Justice and we as lawyers being part thereof ought to be enforced.

Very very good step....taken... by delhi bar association.