2024 (8) TMI 1107 - HC - Service Tax

Demand of service tax - Invocation of extra ordinary jurisdiction of this Court under Article 226 of the Constitution inspite of the statutory remedy available - SCN reply not submitted - health issues of the petitioner - HELD THAT - From the decision in the case of PHR INVENT EDUCATIONAL SOCIETY VERSUS UCO BANK AND OTHERS 2024 (4) TMI 466 - SUPREME COURT (LB) , it is seen that the Supreme Court had observed that the High Court ought not to ordinarily entertain a writ petition under Article 226 of the Constitution, if an effective remedy is available to the aggrieved person and such a principle should be applied with great rigour in matters involving recovery of taxes, cess, fees and other types of public money. Merely because of the fact that the petitioner could not submit the reply to the show cause notice on the ground that he was incapacitated on account of his health problems cannot be a ground to involve the writ remedy more so, when the documents enclosed to the writ petition do not show the petitioner was infact incapacitated from filing the reply to the show cause notice at that relevant part of time. Therefore the question of violation of the principles of natural justice as claimed by the petitioner do not arise. Under such circumstances, this Court finds no ground to entertain the instant writ petition, taking into account that there is an alternative and an efficacious remedy available to the petitioner for which the instant writ petition stands dismissed. This Court is of the opinion that the interest of justice would be met, if further 30 (thirty) days time is granted from today to the petitioner to file an Appeal before the Appellate Authority as mentioned in the impugned order dated 26.03.2024 itself. Accordingly, this Court observes and directs that if the petitioner herein files an appeal within 30 (thirty) days from the date of the instant order, the Commissioner (Appeals) shall decide the appeal on merits without going into the question of limitation. Petition disposed off.

Summary

Issues:
Challenge to Order-In-Original confirming service tax demand, availability of alternative remedy under Section 107 of CGST Act, invocation of Article 226 of the Constitution, violation of principles of natural justice, jurisdiction of High Court to entertain writ petition.

Analysis:
The High Court judgment involved a challenge to an Order-In-Original confirming a service tax demand, interest, and penalty. The petitioner cited personal health issues as the reason for not submitting a show cause reply, invoking the court's extraordinary jurisdiction under Article 226 of the Constitution despite the availability of statutory remedies. The court noted that the impugned order was appealable under Section 107 of the CGST Act within 60 days. The petitioner's argument was based on personal difficulties, but the court referenced a Supreme Court judgment emphasizing the importance of exhausting alternative remedies, particularly in tax recovery matters.

The High Court highlighted a Supreme Court case where it was held that the High Court should not entertain a writ petition under Article 226 if an effective remedy is available, especially in cases involving recovery of public dues. The court also referred to another Supreme Court judgment outlining circumstances where a writ petition could be entertained despite alternative remedies being available, such as fundamental rights enforcement, natural justice violations, lack of jurisdiction, or challenging the vires of an Act. In this case, none of these grounds were present, leading the court to dismiss the writ petition due to the lack of evidence showing the petitioner's incapacity to respond to the show cause notice.

Despite dismissing the writ petition, the court granted the petitioner an additional 30 days to file an appeal before the Appellate Authority mentioned in the impugned order. This decision aimed to ensure the interest of justice was served, allowing the Commissioner (Appeals) to decide the appeal on its merits without considering the question of limitation. The court acknowledged the petitioner's initial approach through the writ petition and the interim protection granted, emphasizing the importance of exhausting statutory remedies before seeking extraordinary relief through the High Court.

In conclusion, the High Court judgment emphasized the importance of exhausting statutory remedies before approaching the court under Article 226 of the Constitution, especially in matters involving tax recovery. The court's decision to dismiss the writ petition while granting additional time to file an appeal aimed to balance the interests of justice and procedural fairness in the case.