The Bar Council of Kerala (BCK) has moved the Kerala High Court challenging orders of the Central Board of Indirect Taxes and Customs (CBIC) for the recovery of of Goods and Service Tax (GST). [Bar Council of Kerala v. The Additional Commissioner]

When the matter was heard on April 1, single-judge Justice Dinesh Kumar Singh issued notice to the CBIC and also ordered that no coercive action be taken against BCK for recovery of taxes, penalties or interest until the matter is posted before the Court again.

The petition moved by BCK stated that the CBIC had issued two show cause notices to it dated April 22, 2022 and September 12, 2023.

The first one was regarding non-payment of service tax from April 2017 to June 2017 under the provisions of the erstwhile Finance Act, 1994. 

The second one was regarding non-payment of GST from July 2017 to March 2022 under the provisions of the Central Goods and Services Act, 2017. 

BCK responded to the notices stating that as a statutory body created by the parliament under the Advocates Act, 1961, it would enjoy the exemption granted to 'government authorities'.

The CBIC heard the bar body but issued an order confirming the show cause notices.

This prompted BCK to move the High Court, arguing that the order of the CBIC was a clear case of non-application of mind. 

The petition by BCK said that it is not a mere person but a 'government authority' for the purpose of levying GST.

"The petitioner performs functions given by the Statute to do so and therefore is a government authority," BCK argued. 

BCK contended that the levies it collects from advocates are statutory levies and that there is no service provider-service recipient relationship between registered advocates and the BCK.

"The Advocates who qualifies as Advocates within the Advocates Act 1961 should mandatorily be given registration as per the provision and the Petitioner is bound to follow of the same and follow the prescriptions therein...It is respectfully submitted that when the activities are mandated by law, the same cannot be attracted service tax," the petition stated. 

On these grounds, BCK sought to quash the order of the CBIC for recovery of tax, penalty and interest. 

The matter will be heard next after the Court's upcoming summer vacation. 

BCK was represented by Senior Advocate Anil D Nair and advocate Aditya Unnikrishnan. 

CBIC was represented by by its standing counsel, advocate Sreelal Warrier.