2024 (9) TMI 1086 - HC - Service Tax

Exercise of jurisdiction under Article 226 of the Constitution vis a vis availability of alternative remedy - it is alleged that the Assessing concerned has made wrong calculations by taking the entire period from 01.04.2017 to 31.03.2018 which could not be have been taken into consideration - HELD THAT - This Court finds it very pertinent to take note of a recent Judgment of the Supreme Court in the case of PHR INVENT EDUCATIONAL SOCIETY VERSUS UCO BANK AND OTHERS 2024 (4) TMI 466 - SUPREME COURT (LB) wherein the Supreme Court dealt with the aspect as regards exercise of jurisdiction under Article 226 of the Constitution vis a vis availability of alternative remedy. Though a perusal of the said Judgment reveals that the said Judgment was delivered in the case of a proceeding under the Securitization And Reconstruction of Financial Assets And Enforcement of Security Interest Act, 2002, but this Court finds it relevant to take note of the observations of 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 rigor in matters involving recovery of taxes, cess, fees and other types of public money. Whether this Court should entertain the writ petition at all? - HELD THAT - In the instant case, the exceptional circumstances as stated in the Judgment of the Supreme Court in the case of M/S GODREJ SARA LEE LTD. VERSUS THE EXCISE AND TAXATION OFFICERCUM- ASSESSING AUTHORITY ORS. 2023 (2) TMI 64 - SUPREME COURT is not present in as much as the question which has been raised by the petitioner is on the question of adjudication of facts as in respect to how much amount the concerned Assessing Authority ought to have taken into consideration and which transaction ought not to have been taken into consideration. These aspects in the opinion of this Court can be very well dealt with by the Statutory Appellate Authority. Under such circumstances, this Court finds no ground to entertain the instant writ petition, taking into account that there is an alternative and 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 27.03.2024 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 regarding service tax amount, interest, and penalty for financial year 2017-18 under Section 73 (2) of Finance Act, 1994. Jurisdiction under Article 226 of the Constitution vs. availability of alternative remedy. Interpretation of recent Supreme Court judgments regarding the entertainment of writ petitions despite the availability of alternative remedies.

Analysis:
The High Court judgment pertains to a writ petition challenging an Order-in-Original regarding service tax, interest, and penalty for the financial year 2017-18. The petitioner contested the calculations made by the Assessing Authority for the entire period from 01.04.2017 to 31.03.2018. The petitioner approached the High Court under Article 226 of the Constitution, disputing the impugned order. However, the High Court noted that the impugned order was appealable under Section 107 of the CGST Act, 2017 to the Commissioner (Appeals) within 60 days from the communication of the order.

The judgment delves into the principle that the High Court should not ordinarily entertain a writ petition under Article 226 if an effective alternative remedy is available, especially in matters involving recovery of taxes and public dues. The Court referenced a recent Supreme Court judgment emphasizing the importance of exhausting alternative remedies before approaching the High Court. The Supreme Court's stance highlighted that the legislations for recovery of dues provide a comprehensive procedure and quasi-judicial bodies for redressal, making it imperative to adhere to the rule of exhaustion of alternative remedy.

Additionally, the judgment cited another Supreme Court case indicating circumstances where a writ petition can be entertained despite the availability of alternative remedies. These circumstances include seeking enforcement of fundamental rights, violation of natural justice principles, lack of jurisdiction, challenge to the vires of an Act, or purely legal questions. However, in the present case, the High Court found that the petitioner's issues regarding the Assessing Authority's consideration of specific transactions could be appropriately addressed by the Statutory Appellate Authority, rendering the writ petition unnecessary.

Consequently, the High Court dismissed the writ petition, emphasizing the availability of an alternative and efficacious remedy through the Statutory Appellate Authority. Despite the dismissal, the Court granted the petitioner an additional 30 days to file an appeal before the Appellate Authority, ensuring justice by allowing the appeal to be decided on merits without limitation concerns. The judgment concluded with the disposal of the writ petition, providing clarity on the course of action for the petitioner.