2018 (8) TMI 1581 - HC - Service Tax

Maintainability of petition - Jurisdiction - demand of service tax - assessee had shifted from UP to Maharashtra and surrendered the service tax registration at UP - Held that - Since the questions which are being raised by the petitioner even otherwise relate to dispute with regard to facts which would require taking of evidence. The best course for the petitioner to take recourse to the statutory remedy available to him. For a period of four months from today or till the disposal of Appeal, whichever is earlier, operation of the impugned order dated 19.09.2017 shall remain in abeyance provided petitioners deposit 25% of the disputed amount of excise dues and furnishes security other than cash and bank guarantee in respect of the balance amount - petition disposed off.

Summary

Issues: Jurisdiction of the Court, Maintainability of the writ petition, Imposition of service tax, penalty, and interest

Jurisdiction of the Court:
The petitioner invoked the writ jurisdiction of the Allahabad High Court against an adjudication order passed by the Assistant Commissioner of CGST and Central Excise Division, Raebareli. The respondent raised a preliminary objection about the maintainability of the writ petition, arguing that it should have been filed before the Lucknow Bench since the order was passed by an authority in Raebareli. The petitioner cited the principle of Section 20 (c) CPC, emphasizing that if any part of the cause of action arose within the territorial jurisdiction of the Allahabad High Court, it had the jurisdiction to hear the matter.

Maintainability of the Writ Petition:
The respondent contended that the petitioner should have approached the appellate authority instead of directly filing a writ petition. The petitioner, however, relied on a legal precedent to support the jurisdiction of the Allahabad High Court due to the cause of action partially arising within its territorial jurisdiction. The petitioner argued that the imposition of service tax, penalty, and interest was without jurisdiction as the business in question was not operational, the registration had been surrendered, and the petitioner was engaged in civil work in Mumbai under a different firm.

Imposition of Service Tax, Penalty, and Interest:
The petitioner claimed that the imposition of ?45,09,352 as service tax, penalty, and late fee + interest was unjustified due to the circumstances of the case. The petitioner had shifted base to Mumbai, ceased operations in Fatehpur, surrendered the registration with the Service Tax Department, and was engaged in a different business activity. The respondent suggested that the petitioner's arguments could be presented before the appellate authority, but the petitioner sought permission to file an appeal under Section 35-F of the Central Excise Act, 1944. The Court advised the petitioner to pursue the statutory remedy available and allowed for the filing of an appeal within a specified timeline.

In conclusion, the Court directed the petitioner to file an appeal within a month, with the assurance of a hearing and decision within the next three months. The operation of the impugned order was stayed for four months or until the appeal's disposal, subject to the petitioner depositing 25% of the disputed excise dues and providing security for the remaining amount. The petitioner was also required to furnish security for the penalty and interest amounts. Ultimately, the writ petition was disposed of in accordance with the Court's directives.