JK Mittal & Company Versus Union of India & Ors.
GST
2017 (7) TMI 542 – DELHI HIGH COURT – 2017 (3) G. S. T. L. 321 (Del.) , [2017] 1 GSTL 1 (Del), [2017] 1 GSTL 35 (Del)
DELHI HIGH COURT – HC
Dated:- 12-7-2017
W.P.(C) 5709/2017 & CM No. 23814/2017 (stay)
GST
MR. S.MURALIDHAR AND MR. PRATHIBA M. SINGH, JJ.
For The Petitioner : Mr. J. K. Mittal, Mr. Hitender Mehta and Mr. Atul Krishna, Advs.
For The Respondents : Mr. Sanjeev Narula and Mr. Abhishek Ghai, Advs. for R-1. And Mr. Gautam Narayan, Additional Standing Counsel for GNCT of Delhi
ORDER
1. Notice. Mr. Sanjeev Narula, learned counsel accepts notice on behalf of Union of India (Respondent No. 1) and Mr. Gautam Narayan, learned Additional Standing Counsel accepts notice on behalf of Govt. of NCT of Delhi (GNCTD) (Respondent No. 2).
2. Notice will issue to Respondent No.3 i.e. the Goods and Service Tax Council (GST Council) through its Secretary. Petitioner is permitted to additionally serve the notice das
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Service Tax Act 2017 (CGST Act), the Delhi Goods and Service Tax Act 2017 (DGST Act) read with Article 279 A of the Constitution of India and have adverse consequences to lawyers in general including himself. Accordingly, in this petition the constitutional validity of the aforesaid notifications is challenged.
5. In addition, the petition also challenges Notification No.5/2017-Central tax dated 19th June, 2017 issued by the Union of India and Notification No. F3(10)/Fin(Rev-I)/2017-18/DS-VI/340 dated 22nd June, 2017 issue by the GNCTD essentially on the ground that these notifications are contrary to the recommendations of GST Council. The petition also challenges the constitutional validity of Section 9 (4) of CGST Act, Section 5(4) of The Integrated Goods and Services Tax Act, 2017 (IGST Act) and Section 9 (4) of DGST Act. He points out that this provision was not to be found in the model laws prepared by the GST Council. It seeks to collect GST on 'reverse charge' basis from a per
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r of provisions of the CGST Act including Section 9 (1), 9 (2), 9 (3) and 9 (5) envisage notifications being issued by the central government “on the recommendations of the Council.” The categorical averment is that the impugned notifications are in violation of this mandatory statutory requirement inasmuch as the GST Council had recommended that legal services as a whole would be amenable to GST only on 'reverse charge' basis. To make good this assertion, Mr. Mittal draws the attention of the Court to the document titled “SERVICES UNDER REVERSE CHARGE AS APPROVED BY GST COUNCIL”. Row 3 of this chart reads as under:-
“SERVICES UNDER REVERSE CHARGE AS APPROVED BY GST COUNCIL
The fitment of rates of services were discussed on 19 May 2017 during the 14th GST Council meeting held at Srinagar, Jammu & Kashmir. The Council has broadly approved the GST rates for services at Nil, 5%, 12%, 18% and 28%. The list of services that will be under reverse charge as proved by the GST Council is giv
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Goods and Services Tax Act 2017 ( 12 of 20 17), the Central Government on the recommendations of the Council hereby notifies that on categories of supply of services mentioned in column (2) or the Table below supplied by a person as specified in column (3) of the said Table, the whole of central tax leviable under section 9 of the said Central Goods and Services Tax Act, shall be paid on reverse charge basis by the recipient of the such services as specified in column (4) of the said Table:-
S. No.
Category of Supply of Services
Supplier of Service
Recipient of Service
2
Services supplied by an individual advocate including a senior advocate by way of representational services before any court, tribunal or authority, directly or indirectly, to any business entity located in the taxable territory including where contract for provision of such service has been entered through another advocate or a firm of advocates or by a firm of advocates, by way of legal services to a busines
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registration. Thus Mr Mittal's FA registration continues. Mr. Mittal draws attention to Section 22(2) of the CGST Act, which reads as under:-
“22 (2) Every person who, on the day immediately preceding the appointment day, is registered or holds a licence under an existing law, shall be liable to be registered under this Act with effect from the appointed day.”
10. He submits that the mere clarification that all legal services are amenable to GST on reverse charge basis may not solve his problem. A legal practitioner like himself who is already registered under the FA would have to be exempted from registration under the GST laws under Section 23 (2) read with Section 22 (2) of the CGST and the corresponding provisions of the IGST Act and DGST Act.
11. One of the central issues that requires to be addressed is whether the impugned Notification No.13/2017 dated 28th and 30th June, 2016 cover all legal services not restricted to representational services rendered by legal practitione
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g great inconvenience to him and other legal practitioners in the matter of receiving and rendering services.
13. Both Mr. Narula, learned counsel appearing on behalf of the Union of India and Mr. Gautam Narayan, learned counsel for the GNCTD seek a short adjournment to take instructions from the respective governments to clarify the legal position in respect of the above impugned notifications. In particular they seek time to obtain a clarification whether all legal services (not restricted to representational services) provided by legal practitioners and firms would be governed by the reverse charge mechanism under the CGST Act, the DGST Act and the IGST Act. They also seek time to obtain clarification regarding the requirement of persons already registered under the FA Act being liable to get registered under the CGST Act, the IGST Act or the DGST Act.
14. In view of the above submissions it is plain that as of date there is no clarity on whether all legal services (not restricted
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