Bombay High Court Reiterates That Service Tax Is Not Applicable On Legal Services

The Bombay High Court recently allowed a writ petition filed by an advocate, holding that legal services rendered by an advocate are exempted from levy of service tax.

On 5 February, a Bench of Justice G.S Kulkarni and Justice Aarti Sathe held that the proceedings were squarely covered by the Court's earlier decision in Advocate Pooja Patil v. Deputy Commissioner.

The Court observed:

“8. The present proceedings also would stand covered by such notifications and the position in law as held by this Court in Advocate Pooja Patil (supra).”

Manisha Rajiv Shroff is an advocate enrolled with the Bar Council of Maharashtra and Goa. In October, 2021, a show cause notice was issued to her, alleging discrepancies between her income tax returns, TDS data and service tax returns. The notice was sent to her old address and was not received by her. Notices for personal hearings were also not served.

In March 2023, the Department passed an order demanding service tax along with interest and penalty for legal services rendered by Shroff to a partnership firm.

Pursuant to the order, recovery proceedings were initiated in October 2025. A lien was created on Shroff's ICICI Bank account without prior notice. She later discovered that her Axis Bank account had also been frozen and obtained a copy of the recovery notice from the Bank.

Shroff approached the Bombay High Court contending that service tax was not leviable on such legal services under the notifications issued by Ministry of Revenue and Ministry of Finance. She also contended that the proceedings violated the principles of natural justice.

The Court accepted her arguments and held that the proceedings were squarely covered by its earlier decision in Advocate Pooja Patil v. Deputy Commissioner. It reiterated that service tax is not leviable on legal services rendered by an advocate.

Accordingly, the Bench allowed the writ petition.

For Petitioner: Advocates Mihir Gupte, Mayank Jain and Pallavi Singh

For Respondents: Advocates Jitendra B. Mishra, Sangeeta Yadav, Rupesh Dubey, Shruti Vyas, Niyati Mankad and Priyanka Singh