The Madras high court on Monday restrained the Union government from collecting service tax from members of the Madras High Court Advocates Association (MHAA).
Justice M. Jaichandran granted the interim injunction on a petition filed by MHAA through its president G. Mohanakrishnan, which also challenged the constitutional validity of the amendment made in Section 65 (105) of the Finance Act, 1994, through the Finance Act, 2011, whereby the representation by an advocate before any court, tribunal or authority and advisory services provided by lawyers were sought to be subject to levy of service tax.
The practice of law has constitutional dimension, which makes it a different genus from other services that were taxable under Article 268 A of the Constitution, said Mohanakrishnan.
The assistance of a lawyer was a constitutional and legal right that citizens and even non-citizens were entitled to in India. Article 22 (1) of the Constitution specifically provides that every person arrested was entitled ‘to consult and to be defended by a legal practitioner of his choice’.
A tax on a constitutional guarantee was anathema to the constitutional scheme and could never have been envisaged by the framers of the Constitution (or their successors vested with amending power), even while introducing Article 268 A, he said.
Mohanakrishnan said the role of an advocate was to efficaciously assist the litigants in obtaining justice, which was a constitutional right of every citizen, and to assist the courts to arrive at a right decision.
This cannot be considered to be rendering service in so far as an advocate was recognised as an officer of the court and engaged in assisting the court and judicial and quasi judicial fora in the dispensation of justice.
The consideration earned by an advocate was already taxed as the income of the advocate and thus cannot be regarded as a transaction of rendering of service.
Various high courts such as Delhi, Andhra Pradesh and Calcutta have granted interim stay of the operation of the said provisions, Mohanakrishnan pointed out.
