2017 (5) TMI 898 - HC - Service Tax

Jurisdiction - Review of an order - Review petitioner had filed W.P.Nos.6599- 6600/2015 seeking for quashing of show cause notices dated 20.02.2013 Annexure-A and 22.05.2014 Annexure-B which relates to the period 2010-11, 2011-12 and 2012-13 whereunder respondent-authorities had proposed to raise demand for service tax as indicated in the said show cause notices. This Court, by order dated 09.03.2015 dismissed the writ petitions as premature by reserving liberty to the petitioner to file reply to show cause notices - Held that - issue regarding jurisdiction to impose service tax on the petitioner and Legislative competency having been challenged, same was required to be examined, adjudicated and answered by this Court and this exercise was not undertaken - As such, order passed by this Court on 09.03.2015 requires to be reviewed - petition allowed - decided in favor of petitioner.

Summary

Issues involved: Review of an order dismissing writ petitions as premature, jurisdictional issue, competence of Union of India to impose tax, pending appeal before CESTAT, challenge to legislative competence, need for examination of jurisdiction and legislative competency.

Analysis:

1. Review of Dismissal Order: The review petitions sought a reconsideration of the order dated 09.03.2015 which dismissed the writ petitions as premature. The petitioner contended that the jurisdictional issue and the competence of the Union of India to impose the tax were raised in the original writ petitions but were not brought to the court's attention when the dismissal order was passed. Therefore, a review of the order was requested based on these grounds.

2. Pending Appeal before CESTAT: It was noted that an appeal was pending before the CESTAT regarding service tax demands for a specific period. The petitioner had complied with a directive to deposit a sum of money, and the matter was still pending before the CESTAT. However, show cause notices for a subsequent period were issued, challenging the legislative competence to levy the tax, which was not highlighted during the disposal of the original writ petitions.

3. Jurisdiction and Legislative Competency: The court acknowledged that the issue of jurisdiction to impose service tax on the petitioner and the legislative competency to do so had been challenged in the writ petitions. It was emphasized that this crucial matter required examination, adjudication, and a proper answer from the court, which was not done during the previous disposal of the case. Therefore, the court concluded that the order needed to be reviewed, and the writ petitions should be heard and decided on their merits.

4. Final Order: In light of the above considerations, the court allowed the review petitions, recalled the order dated 09.03.2015, and restored the writ petitions to the file. Both parties were allowed to present their contentions afresh, and no decision on the merits of the claims was made at that stage. Additionally, no costs were awarded in this matter.

This detailed analysis of the judgment highlights the key issues involved, the reasons for the review, and the court's decision to reconsider the case based on the jurisdictional and legislative competency challenges raised by the petitioner.