2022 (1) TMI 510 - HC - Service Tax

Maintainability of writ petition - Validity of show-cause notice and pre-consultation notice which have been issued without application of mind - waiver of pre-deposit on merits to file appeal and stay on the impugned demand - HELD THAT - The impugned order is appeal-able under Section-73 of the GST Act read with Section-84 of the Finance Act. There is no good ground made out to directly entertain this writ-application questioning the legality and validity of the order in original. It prima-facie appears from the reliefs prayed for that if an appeal is filed, then towards pre-deposit the writ-applicant is obliged to deposit 7.5% of the total demand. This may be a little difficult for the writ-applicant but that by itself is not sufficient for this Court to entertain this writ-application, more particularly, when there is an alternative remedy of statutory appeal being available to the writ-applicant. This writ-application is not entertained on the above short ground alone with liberty to the writ-applicant to prefer an appropriate statutory appeal - writ-application stands disposed of.

Issues:
1. Writ-application under Article 226 of the Constitution of India seeking various reliefs.
2. Applicability of Service Tax and Excise Duty on the services provided by the petitioner.
3. Show-cause notices issued to the petitioner for two financial years.
4. Final order passed confirming the demand of Service Tax, interest, and penalties.
5. Dissatisfaction of the petitioner with the order passed by the Joint Commissioner.
6. Legal contentions raised by the petitioner challenging the order.
7. Court's decision on the appealability of the order and availability of alternative remedies.
8. Court's refusal to entertain the writ-application and direction to pursue statutory appeal.

Analysis:
1. The petitioner, engaged in the business of dyeing and printing of textile articles, sought relief through a writ-application under Article 226 challenging the impugned order-in-original and show-cause notices issued without proper application of mind. The petitioner claimed exemption from Service Tax and Excise Duty based on specific notifications.

2. Show-cause notices were issued to the petitioner for the financial years 2014-15 and 2015-16, demanding Service Tax, interest, and penalties. The notices outlined the reasons for demand related to taxable services provided by the petitioner, including Goods Transport Agency services, and non-payment of Service Tax.

3. The final order confirmed the demand of Service Tax, interest, and penalties for both financial years. The penalties imposed were subject to reduced payment conditions if the dues were settled within a specified period. The order highlighted the consequences of non-compliance and the legal provisions governing the action.

4. Dissatisfied with the order, the petitioner approached the High Court through a writ-application, raising multiple legal contentions challenging the order's legality and validity. However, the Court refrained from delving into the merits of the contentions, emphasizing the appealability of the order under the GST Act and Finance Act.

5. The Court, noting the availability of an alternative remedy of statutory appeal, declined to entertain the writ-application solely based on the petitioner's obligation to deposit a percentage of the total demand as a pre-deposit for filing an appeal. The Court directed the petitioner to pursue the statutory appeal and reserved the right to raise all legal contentions before the appellate authority.

6. The Court disposed of the writ-application, emphasizing the importance of following the statutory appeal process and considering any application for waiver of pre-deposit in accordance with the law. The judgment highlighted the significance of exhausting alternative remedies before seeking judicial intervention.

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