The GST has been here for barely a month now, but its anomalies have already dragged it to Court to resolve the ambiguities raised by the various Notifications issued by the Govt under the GST regime. The Delhi HC was recently faced with the first case of this sort, filed by a lawyer, questioning the confusion caused to him by some Notifications.
Title: J. K. Mittal & Co. v Union
Citation: W.P. (C) NO. 5709 OF
2017; CM NO. 23814 OF 2017 (Delhi
S. MURALIDHAR, J.
PRATHIBA M. SINGH, J.
GST Notifications – contradiction with GST Council recommendations – confusion
w.r.t “reverse charge” mechanism - imposition on services of lawyers.
Statement of Facts:
The petition was filed by Mr. J K Mittal citing that
these Notifications will have adverse consequences on lawyers in general; earlier
Notifications of the Govt stood for the exemption of liability of lawyers/Firms
in respect of all services provided by them to clients and only the client was
to pay on the reverse-charge basis. He points out the technical disparities
between the wordings used in the subsequent Notifications, in effect limiting
the exemption only to representational services rendered by lawyers to clients.
an additional difficulty pointed out by him is that the Finance Act had earlier
required lawyers to register as service-providers, but the subsequent change of
bringing it under the reverse-charge category did not bring with it any
provision for de-registration.
Decision of the
Delhi High Court clarified in its order that no
coercive action should be taken against any lawyer or law firms for
non-compliance with any legal requirement under the CGST Act, the IGST Act or
the DGST Act till a clarification is issued by the Central Government.
portions of the Order
“….it is plain
that as of date there is no clarity on whether all legal services (not restricted to
representational services) provided by legal practitioners and firms would be governed
by the reverse charge mechanism…”
therefore prima facie merit in
the contention of Mr Mittal that the legal practitioners are under a genuine
doubt whether they require to get themselves registered under the three
action be taken against any lawyer or law firms for non-compliance with any
legal requirement under the CGST Act, the IGST Act or the DGST Act till a
clarification is issued by the Central Government and the GNCTD and till further
orders in that regard by this Court…”
“…any lawyer or
law firm that has been registered under the CGST Act, or the IGST Act or the
DGST Act from 1st July, 2017 onwards will not be denied the benefit of such
clarification as and when it is issued.
appropriate clarification is not able to be issued by the [UoI and GNCTD] by
the next date, the Court will proceed to consider passing appropriate interim