2016 (2) TMI 809 - HC - Service Tax

Jurisdiction to raise service tax demand - the appeal was entertained in which the challenge was raised against the same assessment order which is under challenged in this writ petition. - The petitioner has again come up before this Court raising a direct challenge to the assessment order which has been subject matter of appeal. - Held that - The issue of jurisdiction to impose service tax can also be raised and decided in the appeal itself. The petitioner did avail the remedy of appeal to avoid the pre deposit amount, but the Supreme Court turn down the said prayer. - Writ petition dismissed - Decided against the assessee.

Summary

Issues:
Challenge to demand-cum-show cause notice and assessment order based on jurisdiction to impose service tax. Maintainability of writ petition under Article 226 of the Constitution of India. Permissibility of collateral challenge.

Analysis:
The petitioner sought to quash an impugned demand-cum-show cause notice and an original assessment order, arguing that the imposition of service tax on them lacked jurisdiction. Citing a recent Supreme Court decision, the petitioner contended that any realization or demand made without lawful authority should be invalidated. The petitioner maintained that the writ petition was maintainable under Article 226 of the Constitution of India despite any intervening proceedings. However, the respondent argued that the petitioner had already lost a related battle up to the Apex Court and that raising a collateral challenge was impermissible. The petitioner, on the other hand, asserted that challenges to jurisdictional matters were permissible through a writ petition, citing various Supreme Court decisions in support.

The court considered the submissions and found that the assessment order in question had been the subject of an appeal where the petitioner had refused to make a pre-deposit due to financial constraints. Despite multiple appeals and review petitions, the petitioner's challenge to the assessment order was already entertained through the statutory appeal process under the Central Excise Act, 1944. The court noted that the same grounds for challenge were available in the appeal itself, including the issue of jurisdiction to impose service tax. The Supreme Court had rejected the petitioner's plea to avoid the pre-deposit amount, leading to the dismissal of subsequent review petitions. Consequently, the court held that the present writ petition, directly challenging the assessment order already subject to appeal, was misconceived and dismissed it. The petitioner was advised to explore remedies available under statutory provisions.