2010 (1) TMI 636 - HC - Service Tax

Condonation of delay - Demand - Penalty - Clearing and forwarding agent - there is no dispute that the petitioner had the right to file an appeal against the order impugned in this writ petition - Though an alternate remedy may not be a bar for interference under Article 226 of the Constitution, being a constitutional remedy, the High Court will sparingly exercise the jurisdiction by way of self imposed restriction - even if writ petition was filed under Article 226 of the Constitution of India at a time when an appellate remedy is not barred, this Court could certainly say it would not entertain a writ petition, if the reliefs sought for in the writ petition are available to be granted by invoking the statutory remedy provided under the Statute - Held that party whose remedy by way of an appeal under the statute is barred by the period prescribed thereunder is no reason by itself to invoke the extraordinary jurisdiction under Article 226 of the Constitution of India - there is no extraordinary situation for invoking the power under Article 226 of the Constitution of India, even if this writ petition is filed within the period of limitation - Decided against the petitioner

Summary

Issues Involved:
1. Whether the petitioner can invoke the jurisdiction of the High Court under Article 226 of the Constitution of India after the statutory period for filing an appeal has expired.
2. Whether the High Court can entertain a writ petition under Article 226 when an alternative statutory remedy is available but not availed within the prescribed time.

Detailed Analysis:

1. Invoking Jurisdiction Under Article 226 After Expiry of Statutory Appeal Period:
The petitioner, a registered service provider, was issued a show cause notice (Ext.P3) for the alleged difference in service tax, which was contested but ultimately resulted in a demand and penalty order (Ext.P5). The petitioner failed to file an appeal within the statutory period of three months as prescribed under Section 85 of the Finance Act, 1994. The petitioner argued that the person responsible for tax matters had left without informing about the receipt of Ext.P5, and only upon receiving a subsequent notice did the petitioner become aware of the order.

The respondents contended, relying on the Division Bench decision in *Asst. Commissioner of Central Excise v. Krishna Poduval*, that once the period of limitation for filing the appeal expired, the remedy of the petitioner ended, and no cause survived to entertain the writ petition. The petitioner, however, argued that the High Court's power under Article 226 of the Constitution remains available even if the statutory remedy is not.

2. Entertaining Writ Petition Under Article 226 When Alternative Remedy Exists:
The petitioner cited several cases, including *Rayalseema Constructions and Another v. Deputy Commercial Tax Officer* and *K. Venkatachalam v. A. Swamickan*, to argue that the High Court can exercise jurisdiction under Article 226 in exceptional circumstances. The respondents countered with the decision in *Surya Dev Rai v. Ram Chander Rai*, asserting that the High Court generally refrains from entertaining writ petitions when an effective appellate remedy is available, unless there are exceptional circumstances.

The Court reviewed the principles laid down in various cases, including the Supreme Court's decision in *Surya Dev Rai*, which outlined the circumstances under which the High Court's jurisdiction under Articles 226 and 227 could be invoked. The principles emphasize that such jurisdiction should be exercised sparingly and only in cases of gross jurisdictional errors, failure of justice, or when statutory remedies are inadequate or unavailable.

The Court also referred to decisions like *Prasad v. State of Kerala*, *Krishnan T. and Another v. State of Kerala*, and *Kerala Motor Transport W.W.F. Board v. Government of Kerala*, which consistently held that when the statutory period for appeal has expired, the High Court should not entertain a writ petition under Article 226 to bypass the statutory limitation.

In conclusion, the Court found no extraordinary circumstances warranting the invocation of Article 226. The reliefs sought by the petitioner could have been granted by the appellate authority, and the failure to invoke the statutory remedy within the prescribed period was not a sufficient reason to entertain the writ petition. Consequently, the writ petitions were dismissed.