2019 (11) TMI 1167 - HC - Service Tax

Maintainability of petition - efficacious statutory remedy of appeal - Section 86 of the Finance Act, 1994 - demand of service tax - HELD THAT - True, it is that despite existence of an alternative remedy, it is within the discretion of the High Court to entertain an application under Article 226 of the Constitution of India. However, when the statutory remedy is created under the Act for the redressal of grievances, it would not be proper to entertain the writ petition ignoring the statutory dispensation. In view of the availability of an equally efficacious statutory remedy of appeal to the petitioner under the Act, we are not inclined to entertain the present application in extra writ jurisdiction under Article 226 of the Constitution of India - the application is dismissed with liberty to the petitioner to avail of the statutory remedy provided under the Act.

Summary

Issues:
Challenge to Order-In-Appeal and Order-In-Original, Maintainability of the present application under Section 86 of the Finance Act, Burden of proof for determining Service Tax Payable, Imposition of penalty without proper findings, Availability of statutory remedy, Discretion of the High Court to entertain application under Article 226 of the Constitution of India.

Analysis:
The petitioner challenged Order-In-Appeal and Order-In-Original related to Service Tax, prompting a preliminary objection on the maintainability of the application under Section 86 of the Finance Act. The petitioner's counsel argued that authorities unjustly determined the Service Tax amount based on assumptions, shifting the burden of proof onto the authorities. He contended that imposing penalties without proper findings is legally unjustified and that having a statutory remedy does not bar an Article 226 application under the Constitution of India.

The High Court acknowledged its discretion to entertain Article 226 applications despite statutory remedies but emphasized that when a statutory remedy exists, it should not be disregarded. Consequently, due to the availability of an equally efficacious statutory remedy for the petitioner under the Act, the Court declined to entertain the application under Article 226.

The Court dismissed the application but granted the petitioner liberty to utilize the statutory remedy under the Act. If an appeal is filed before the Tribunal under Section 86 of the Finance Act within two weeks, along with an application for condonation of any filing delay, the Tribunal is instructed to condone the delay and adjudicate the appeal on its merits according to the law.