Bombay High Court Hears Constitutional Challenge to Service Tax on Advocates. The Levy Under Section 65(105)(zzzzm) of the Finance Act, 1994 is Challenged as Ultra Vires Articles 14, 19(1)(g), and 265 of the Constitution.

Public interest litigation challenging the constitutional validity of service tax on advocates under the Finance Act, 1994.

To declare section 65(105)(zzzzm) of the Finance Act, 1994 as inserted by Finance Act, 2011 as null and void, quash section 71(A)(5)(d) of the Finance Act, 2011, and issue a writ of mandamus restraining the respondents from collecting service tax on advocates.

The levy of service tax on advocates is alleged to be unconstitutional, arbitrary, discriminatory, and violative of fundamental rights and principles of access to justice.

Whether section 65(105)(zzzzm) of the Finance Act, 1994, levying service tax on advocates, is ultra vires Articles 14, 19(1)(g), 21, 246, 265, and 268A of the Constitution. Whether the amendment violates the principle of equality by discriminating between representation of individuals and business entities. Whether advocates, as officers of the court, provide a 'service' within the meaning of the Finance Act, thereby attracting service tax. Whether the levy imposes an unreasonable restriction on the right to practice a profession under Article 19(1)(g). Whether the levy denies access to justice contrary to Article 39A. Whether the provision is beyond the legislative competence of Parliament under Article 246.

Advocates are officers of the court and not engaged in a profit-making business; their fees are honorarium, not contractual consideration. The levy denies litigants affordable access to justice, increasing the cost of legal representation. The amendment discriminates between representation of individuals (exempt) and business entities (taxed), violating Article 14. The levy is arbitrary, unreasonable, and violative of Article 19(1)(g) of the Constitution. The relationship between advocate and client is not a commercial service but a fiduciary one, thus outside the scope of service tax. The amendment is beyond legislative competence and violates the constitutional scheme under Articles 246 and 265. Service tax on advocates also covers representation in arbitration, which is a quasi-judicial function and not a service.

the said amendment discriminates between representation made on behalf of an individual and representation made on behalf of a business entity (Para 7) An Advocate is an officer of the Court. It is for this reason that the fees received by an Advocate is regarded as a mere honorarium and not as a matter of contractual right. (Para 6)

The writ petitions were filed under Article 226 of the Constitution of India. Rule was issued, respondents waived service, and by consent rule was made returnable forthwith. The matter was heard and reserved on 11 November 2014, and judgment was pronounced on 15 December 2014.

• Finance Act, 1994: Section 65(105)(zzzzm), Section 66, Section 71(A)(5)(d), Section 77, Section 89
• Service Tax Rules, 1994: Rule 4A
• Constitution of India: Article 13, Article 14, Article 19(1)(g), Article 21, Article 39A, Article 246, Article 265, Article 268A, Article 226
• Finance Act, 2009:
• Finance Act, 2011: