2021 (11) TMI 177 - HC - Service Tax

Maintainability of petition - availability of alternative remedy - Non-payment/short payment of service tax - whether the Commissioner was right in proceeding to hold that none of the case laws submitted by the petitioner had application in the case? - HELD THAT - There is nothing in Article 226 of the Constitution of India which refers to an alternative efficacious speedy remedy made available by a statute leading to ouster of jurisdiction of the writ court. By judicial pronouncements, certain restrictions have been imposed in the exercise of discretion bearing in mind that writ remedy is after all a discretionary remedy. One of these self-imposed restrictions is when an aggrieved party has a remedy under a statute, the writ court may in the judicious exercise of its discretion decline interference and relegate the party to avail such remedy. Since violation of principles of natural justice is the point based whereon the writ court s jurisdiction has been invoked, we hold on the pleaded case in the writ petition that the petitioner has not asserted any of the fundamental principles of natural justice, as understood in the traditional and contemporary sense, viz. audi alteram partem or nemo debet esse judex in propria causa, to have been breached - It has also been held to violate natural justice if the order that is ultimately passed in the proceedings, after extending due, adequate and reasonable opportunity of hearing, does not reveal the grounds in support of the conclusion reached by the decision maker. The first and the most prominent shade is where an order is passed without notice/without opportunity/without hearing. In such a case, there is an obtrusive violation of the rule of audi alteram partem and the writ court may not labour much to decide on the entertainability of a writ petition even if an alternative efficacious speedy remedy were made available by a statute. Complaints of violation of natural justice, which fall in the second shade and may appear to be lighter than the first, are orders passed without reasons - It is also not the complaint that the order has not assigned reasons in support of the conclusion reached. The petitioner is left aggrieved because the impugned order does not say, in so many words, as to why the authorities cited by it were not considered to be applicable. A judicial order is obviously required to deal with the authorities cited in a manner that reflects application of mind, but it is not always the case in respect of an order of the present nature. If at all, we would view the omission of the Commissioner not to separately deal with the authorities cited as something like an error committed within jurisdiction which is not the same as acting in excess of jurisdiction. Such error, if required, can be corrected by the Tribunal if at all the same is approached. We, therefore, do not propose to hold that the order impugned suffers from a violation of principles of natural justice. There is no ground of substance to entertain this writ petition despite the statutory remedy of appeal being available to the petitioner. Petition dismissed.

Summary

Issues:
Challenge to order-in-original assessing service tax dues; Maintainability of writ petition against appellate forum availability; Violation of principles of natural justice in the order under challenge.

Analysis:
1. The petitioner challenged an order-in-original assessing service tax dues, passed on a show-cause notice alleging non-payment/short payment of service tax. The respondents objected to the maintainability of the writ petition, arguing that the petitioner should appeal to the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) first, citing precedents where appellate remedies were emphasized over writ petitions.

2. The petitioner argued that the availability of a statutory appellate remedy does not always bar the jurisdiction of the Court under Article 226 of the Constitution of India. They referred to exceptions where a writ petition could be entertained, such as breach of fundamental rights, violation of natural justice, excess of jurisdiction, or challenge to the vires of a statute. The petitioner contended that the order under challenge showed a breach of natural justice, specifically in the Commissioner's failure to provide reasons for not applying the case laws cited.

3. The Court examined whether the order-in-original violated principles of natural justice. They noted that while the order had reasons for the conclusions reached, the petitioner argued that the Commissioner's failure to provide separate reasons for not applying the cited case laws amounted to a violation of natural justice. The Court referred to previous decisions emphasizing the importance of recording reasons in quasi-judicial functions.

4. The Court highlighted that the Commissioner, acting in an administrative capacity, was not required to provide detailed reasoning akin to a judicial order. They concluded that the omission to separately address the cited authorities was not a violation of natural justice warranting interference through a writ petition, especially when a statutory remedy of appeal was available. The Court declined to interfere and dismissed the writ petition, allowing the petitioner to pursue the appellate remedy.

5. The Court emphasized that the availability of an alternative statutory remedy does not always preclude the jurisdiction of the writ court, but specific circumstances, such as a clear violation of natural justice, must be established to warrant interference through a writ petition. The judgment reiterated the importance of principles of natural justice in administrative actions but concluded that the order-in-original did not suffer from such a violation justifying the Court's intervention.