2024 (1) TMI 1307 - HC - Service Tax

Maintainability of petition - petition filed without exhausting the efficacious alternative remedy of appeal - imposing service tax and penalty under Finance Act - HELD THAT - A perusal of the impugned order indicates that except stating that the services rendered are exempted from service tax, the petitioner has not produced any documents to substantiate that the services rendered by him were exempted from service tax. Therefore, respondent No.1, on the available material on record has rightly passed the impugned order after providing several opportunities of personal hearing to the petitioner, which the petitioner did not avail without any sufficient cause. Whether the services of the petitioner are exempted from service tax is a matter which requires consideration by the appellate authority, and since there is a dispute as to whether the services rendered by the petitioner are exempted from service tax, the same cannot be adjudicated in this petition, and it is open for the petitioner to approach the appellate authority for redressal of his grievances. The petition stands dismissed, reserving liberty to the petitioner to file an appeal under section 85 and 86 of the Finance Act. The time spent in prosecuting this petition to be excluded for the purpose of computation of limitation period in preferring the appeal before the appellate authority.

Summary

Issues:
Challenge to order imposing service tax and penalty under Finance Act without exhausting appeal remedy.

Analysis:
The petitioner challenged an order holding them liable to pay a substantial amount towards service tax and penalty. The petitioner argued that the services provided were exempted by a government notification, making the order invalid. However, the petitioner failed to provide documents to substantiate this claim due to unavoidable circumstances. The respondent contended that the petitioner did not respond adequately to notices and failed to avail opportunities for personal hearings. The impugned order was passed under section 73 of the Finance Act, with avenues for appeal under sections 85 and 86, making the petition premature without exhausting the appeal remedy.

Upon considering the arguments, the court noted that the petitioner did not attend a pre-show cause notice and failed to provide sufficient documentation to support the exemption claim. The respondent passed the order based on the available record and after offering multiple opportunities for personal hearings that the petitioner did not utilize. The court emphasized that the question of whether the services were exempt from service tax should be addressed by the appellate authority due to the existing dispute. Consequently, the court dismissed the petition, allowing the petitioner the option to appeal under sections 85 and 86 of the Finance Act. The time spent on the petition would be excluded from the limitation period for filing an appeal, and all contentions were left open for further consideration.