2015 (1) TMI 901 - HC - Service Tax

Violation of principle of natural justice - Without issuance of SCN, initiation of proceedings - whether there has been any alternative remedy, contrary to what has been stated by the writ petitioner in paragraph 10 that the petitioner has no other alternative remedy except to approach this Court under Article 226 of the Constitution of India. - Held that - Commissioner has taken decision undisputedly. The petitioner preferred appeal therefrom to the appellate Commissioner, who is the first appellate authority. We have examined the orders of both the authorities. We are of the view that the matter has been decided by them rightly or wrongly. So, it is an order as defined under Section 86 of the Finance Act, 1994. Therefore, the statement made in paragraph 10 is absolutely incorrect and we hold so without any hesitation. - Alternate remedy available - Decided in against the assessee.

Summary

Issues:
1. Whether the demand of service tax without issuance of show cause notice and adjudicating the liability by passing order is arbitrary and illegal.
2. Whether the letter dated 19-8-2013, order of the second respondent dated 18-12-2013, and order dated 28-2-2014 passed by the 4th respondent-appellate authority should be quashed and set aside.
3. Whether the petitioner has an alternative remedy to approach the Tribunal under Section 86 of the Finance Act, 1994.

Analysis:
1. The petitioner sought relief through a writ petition declaring the imposition and demand of service tax without show cause notice as arbitrary and illegal. The petitioner paid the service tax under protest for the assessment years 2006-07 and 2007-08. The second respondent contended that the payment was against the liability, not under protest. Despite the petitioner's claim for a refund and assertion that the demand was not lawful, the second respondent passed an order on 18-12-2013, which was upheld on appeal. The petitioner argued that without a show cause notice, the orders were null and void.

2. The petitioner invoked Article 226 of the Constitution of India, claiming a violation of natural justice due to the absence of a show cause notice and the orders not being passed under the law. The Court examined the appeal provision under Section 86 of the Finance Act, 1994, which allows appeals to the Appellate Tribunal. The Commissioner and the appellate Commissioner had already decided on the matter, making it an order under the Act. The Court dismissed the writ petition, citing the existence of an alternative remedy through the Tribunal.

3. Despite arguments on both the alternative remedy and the merits of the case, the Court held that the petitioner had an alternative remedy under Section 86 of the Finance Act, 1994, and dismissed the writ petition. The petitioner was directed to pay costs to the Andhra Pradesh State Legal Services Authority but was given liberty to approach the appropriate forum as per the law. Any pending miscellaneous petitions were also dismissed as a consequence of the judgment.