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SILF takes Gov't to court over law firm service tax


The Society of Indian Law Firms (SILF) has filed a writ in the Bombay High Court against the most recent Union Budget's service tax on law firms, contesting its rationality and constitutional grounds.

The writ claims that the tax violates the Constitution of India's Articles 19(1)(c) and 14 – the right of citizens to form associations or unions and equality before law, respectively.

SILF is seeking a writ of mandamus in respect of the Finance (No.2) Act 2009 in respect of the law firm service tax.

The organisation hopes to restrain the Government from implementing the tax and wants to prohibit it from taking any "coercive steps or actions" against the petitioners until the "final disposal of the petition".

The 2009-10 Union Budget proposed on 6 July that a 10 per cent service tax would be payable on legal advice rendered by lawyers working in law firms but not on individual advocates or court appearances.

In the writ now filed SILF claims that differentiating between law firms and individual advocates under the service tax is "arbitrary, unintelligible, unreasonable, discriminatory and has no rational nexus to the object sought to be achieved".

"Such a classification creates a hostile discrimination between advocates as a class in itself," adds the writ.

Practising lawyers reacted with outrage when the service tax was first introduced in July and litigating lawyers striked in Delhi and Lucknow High Courts protesting the new tax.

Legally India reported at the time that SILF was considering legal action if other efforts to lobby against the service tax proved fruitless.

It is understood that SILF committee members and law firm managing partners Lalit Bhasin, Rajiv Luthra, Jyoti Sagar and Cyril Shroff were instrumental in encouraging SILF to bring the claim.

The writ listed as Society of Indian Law Firms and 2 ors. vs Union Of India and 3 ors. was registered on 21 November in the Bombay High Court.

Click here for a detailed list of the grounds.

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