2017 (11) TMI 1718 - HC - Service Tax

Territorial jurisdiction of the Commissioner of the Service Tax Raipur - Did CESTAT act otherwise than in accordance with law by not considering the issue of territorial jurisdiction of the Commissioner Service Tax Raipur to pass the order which was the impugned before the Tribunal? - Held that - Held that - he impugned order of CESTAT is vitiated for non-consideration of the question of the territorial jurisdiction of the Commissioner Service Tax Raipur as specifically raised in the appeal before CESTAT. This is more particularly because such issue of territorial jurisdiction was raised before the authority of the first instance at the earliest opportunity. The collateral issue based on the doctrine of prejudice has also to be answered in favour of the appellant since non-consideration of the territorial jurisdiction of the Commission at Raipur in spite of such plea being specifically raised may foreclose that issue qua the appellant which it is submitted has operations elsewhere as well. Appeal allowed.

Summary

Issues:
Territorial jurisdiction of the Commissioner of Service Tax, Raipur in passing the impugned order by CESTAT.

Analysis:
The High Court of Chhattisgarh, comprising Thottathil B. Radhakrishnan, CJ and Sharad Kumar Gupta, JJ, heard the appeal regarding the territorial jurisdiction of the Commissioner of Service Tax, Raipur in relation to the order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The substantial question of law was whether CESTAT erred in not considering the issue of territorial jurisdiction of the Commissioner in passing the impugned order. The appellant contended that the territorial jurisdiction issue was raised before both the Commissioner and CESTAT but was left unconsidered. The High Court acknowledged that the issue should have been addressed by the Tribunal and could not be raised for the first time before the Court. Despite persuasive arguments from the Revenue, the High Court held that the question of territorial jurisdiction must be considered by CESTAT, especially since it was raised at the earliest opportunity.

Furthermore, the High Court found that the impugned order of CESTAT was flawed due to the non-consideration of the territorial jurisdiction issue, which was crucial as it was raised promptly before the relevant authorities. The High Court ruled in favor of the appellant, emphasizing that the doctrine of prejudice supported the appellant's position. As a result, the appeal was allowed, and the High Court directed CESTAT to reconsider the appellant's contention that the Commissioner, Service Tax, Raipur lacked jurisdiction to issue the impugned order. All findings in the impugned order were vacated, and the Tribunal was instructed to re-examine all issues without expressing any opinion on their merits. The impugned order was set aside, and the appeal was remanded to CESTAT for fresh consideration, with parties directed to appear before the Tribunal's Office on a specified date.