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Issues involved: Impugning order confirming demand of service tax for supply of tangible goods, seeking declaration on applicability of service tax u/s 65(105)(zzzzj) of Finance Act, 1994, and seeking direction for payment of value added tax.
Impugned Order: The petitioner company let heavy machinery on hire to customers. Show cause notice issued for payment of service tax on 'business auxiliary service' and 'supply of tangible goods service'. Commissioner confirmed demand for 'supply of tangible goods service' but dropped demand for 'business auxiliary services'. Alternate Remedy: Respondents raised preliminary objection on tenability of petition due to alternate remedy u/s 86 of Finance Act. Petitioner argued appeal under section 86 would not be efficacious as per circulars issued by Finance Department. Court held that issue can be decided in appeal under section 86 and dismissed the writ petition. Appellate Authority: Excise Commissioner filed appeal under section 86 against part of order dropping demand for business auxiliary service. Appellate authority can decide correctness of demand for supply of tangible goods and applicability of circulars issued by Finance Department. Judicial Restraint: High Court should exercise restraint in entertaining writ petitions in tax matters when effective alternate remedy is provided under statute. Issue of liability to pay service tax or sales tax arises only if challenge to Commissioner's order fails. Decision: Preliminary objection upheld, writ petition dismissed. Petitioner granted liberty to file appeal within one month. Appellate authority to decide on merits, keeping all questions raised in writ petition open.
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