2010 (8) TMI 44 - HC - Service Tax

Amendment to constitution - This writ petition preferred under Articles 226 and 227 of the Constitution of India petitioner has prayed for issue of writ of certiorari for quashment of the miscellaneous order passed by the Larger Bench of Tribunal and to clarify the 46th Constitution Amendment to the extent it has no relevance for imposition of service tax. Held that allowing such challenge would enable every litigant to challenge order passed in a reference. Stage not appropriate for filing writ petition. Petition dismissed.

Summary

Issues:
1. Challenge to the order of a Larger Bench of the Customs, Excise and Service Tax Appellate Tribunal.
2. Interpretation of the 46th Constitution Amendment regarding the imposition of service tax.
3. Maintainability of a writ petition under Articles 226 and 227 of the Constitution of India.

Analysis:
1. The petitioner filed a writ petition under Articles 226 and 227 of the Constitution of India challenging the order of a Larger Bench of the Customs, Excise and Service Tax Appellate Tribunal seeking the issuance of a writ of certiorari to quash the miscellaneous order dated 6th May, 2010. The controversy arose from a reference made by a Division Bench of the tribunal regarding the imposition of service tax on services provided under turnkey contracts. The tribunal opined that turnkey contracts can be vivisected to segregate and classify discernible service elements for the levy of service tax under the Finance Act, 1994. The Special Bench directed the cases to be sent back to the concerned Benches for disposal. The petitioner, an intervener in the matter, challenged the Special Bench's order through the writ petition.

2. The Additional Solicitor General raised a preliminary objection to the maintainability of the writ petition on the grounds that challenging an order of a Larger Bench through a writ petition is not the proper course, and the petitioner should resort to appeal under Sections 35G or 35L of the Central Excise Act, 1944. The petitioner argued for locus standi to challenge the order, citing relevant legal precedents. The court examined the arguments and held that the petitioner, being just an intervener, cannot challenge the order under Article 226 unless directly affected. The court emphasized that the writ petition stage was not appropriate for the challenge, and the petitioner could resort to filing an appeal before a superior forum as provided by the statute. Consequently, the court dismissed the writ petition and application, without imposing any costs.

3. Regarding the interpretation of the 46th Constitution Amendment, the court declined to address the issue as it did not directly arise for interpretation, emphasizing that the court does not clarify provisions in a vacuum. The court highlighted that entertaining such challenges at the intervention stage could lead to a flood of litigants challenging orders passed in references. The court concluded that while the writ petition was not held entirely maintainable, it was not the appropriate stage for the challenge, and the petitioner could seek recourse through appeal if directly affected by the division bench's order.