2022 (4) TMI 1557 - HC - Service Tax

Demand of CENVAT Credit alongwith interest and penalty - invocation of extraordinary jurisdiction of the court - violation of principles of natural justice - violation of statute - want of Jurisdiction - HELD THAT - Insofar as entertaining a writ petition challenging the order like the present one which is impugned herein passed by the original authority by way of Order-in-Original when there is a clear alternative, effective statutory appeal remedy is available, the same should be exhausted, without which, the litigant normally would not be permitted to invoke the extraordinary jurisdiction of this Court under Article 226 of the Constitution except under the following three circumstances (i) Violation of Principles of Natural Justice; (ii) Violation of Statute; and (iii) For want of jurisdiction. The mere pendency of any issue before the Court would not preclude the Assessing Authority or the original Adjudicating Authority to proceed in accordance with law, especially under the provisions of the statute under which they are functioning. Unless and until there is a specific order of stay prohibiting or forbearing the authorities concerned from proceeding further in a particular proceedings, generally such kind of request made by the assessee or noticee to defer the hearing to get a decision in the related case pending before any Court of law would not be entertained. Therefore, that kind of request if it is rejected it cannot be termed as 'violation of principles of natural justice'. This Court feels that, in this writ petition, without entertaining the same on merits, the petitioner can be relegated to go before the Appellate Authority within a time frame - Petition dismissed.

Summary

Issues:
Challenge to Order-in-Original demanding CENVAT Credit, interest, and penalty - Violation of principles of natural justice in not granting adjournment for pending court orders - Availability of statutory appeal remedy.

Analysis:
The petitioner sought a Writ of Certiorarified Mandamus to challenge Order-in-Original No.1/2019 demanding CENVAT Credit of Rs.10,36,905/-, interest, and penalty. The petitioner availed the credit, which was sought to be reversed, leading to a show cause notice and a personal hearing on 30.07.2018. However, due to the officer's transfer, a new hearing was conducted on 03.01.2019, where the petitioner requested an adjournment pending court orders, which was not granted. This led to the allegation of violation of natural justice, prompting the challenge before the High Court.

The respondent argued that an appeal could be filed before the Appellate Authority against the Order-in-Original, emphasizing the availability of statutory appeal remedies. The Court noted that challenging such orders through a writ petition should be done after exhausting statutory appeal remedies unless there are violations of natural justice, statute, or lack of jurisdiction. The petitioner contended that not granting a hearing based on pending court orders violated natural justice. However, the Court disagreed, stating that the mere pendency of issues at various courts does not prevent authorities from proceeding as per law unless there is a specific stay order.

The Court highlighted that requests to defer hearings based on related court cases are generally not entertained unless there is a specific stay order, and rejecting such requests does not amount to a violation of natural justice. Consequently, the Court decided to dismiss the writ petition, directing the petitioner to file an appeal before the Appellate Authority within two weeks. The appeal would then be decided on merits and in accordance with the law, ensuring a full hearing for both sides. The Court concluded by dismissing the writ petition without costs and closing the connected miscellaneous petition.