2010 (10) TMI 53 - HC - Service Tax

Repair and Maintenance Service - exemption from service tax - road management, maintenance or repair service - notification no. 23/2009 - whether retrospective or prospective - validity of circular no 110/4/2009-ST, dated 23.2.2009 - Held that - The notification dated 27.7.2009 cannot be given retrospective effect in the absence of specific and express provision as held by the Supreme Court in the decision Commissioner of Customs v. Spice Telecom 2006 -TMI - 852 - SUPREME COURT OF INDIA - Thus, the notification dated 27.7.2009 granting exemption from levy of service tax to road maintenance and repairs is to be held only as prospective and for the earlier period the petitioners are bound to produce the records to the show cause notice/summons. petitioners have not suffered any legal injury so as to rush to this court even at the stage of summons issued by the authority. Even after furnishing information if the respondents erroneously taxed the petitioner, there is remedy provided by way of appeal under section 85 to the appellate authority and further appeal to the appellate Tribunal under section 86. When the Act itself is self contained Code provided for hierarchy of appeals, it is unnecessary to entertain the writ petitions at the stage of summons

Issues:
Challenge to summons issued under section 14 of Central Excise Act, 1944; Jurisdictional validity of summons; Exemption under Finance Act, 1994; Maintainability of writ petitions against summons; Interpretation of exemption notification No.24/2009; Prematurity of challenging the validity of circulars; Requirement to produce documents for the period in question; Availability of alternative remedies under the Act; Applicability of recent Supreme Court judgment on maintainability of writ petitions.

Analysis:

1. Challenge to Summons under Central Excise Act:
The petitioners contested the jurisdiction of the summons issued by the respondents under section 14 of the Central Excise Act, 1944. They argued that they were not liable to pay service tax as per the Finance Act, 1994, and specific exemptions were granted by the Central Government, including a retrospective exemption under notification No.24/2009 dated 27.7.2009. The petitioners claimed that the summons were issued without jurisdiction.

2. Maintainability of Writ Petitions:
The respondents raised objections regarding the maintainability of the writ petitions against the mere issuance of summons. The court considered whether the petitioners could avail alternative remedies and whether the association filing the petitions had the legal standing to maintain such writ petitions.

3. Interpretation of Exemption Notification:
The judgment discussed the interpretation of exemption notification No.24/2009, particularly focusing on the exemption granted for management, maintenance, or repair of roads from paying service tax. The court analyzed whether the exemption could be availed retrospectively and the implications of the notification on the petitioners' liability for the period in question.

4. Prematurity of Challenging Circulars:
The court addressed the premature nature of challenging the validity of circulars related to the Finance Act, 2005, and the implications of such challenges on the petitioners' liability. The judgment emphasized that if there was ambiguity in the Finance Act, the petitioners could benefit from raising such issues at the appropriate stage.

5. Requirement to Produce Documents:
Regarding the production of documents for the period specified, the court held that the petitioners were obligated to produce the documents before the authority concerned. The authorities were directed to consider all aspects in light of the Finance Act, 1994 and 2005, without reference to the circulars issued, while adjudicating the matter.

6. Availability of Alternative Remedies:
The judgment highlighted the availability of alternative remedies under the Act, including appeals to the appellate authority and appellate tribunal. It emphasized that the Act provided a self-contained code with a hierarchy of appeals, making it unnecessary to entertain writ petitions at the summons stage.

7. Applicability of Recent Supreme Court Judgment:
The court referred to a recent Supreme Court judgment emphasizing that when a statutory forum is created for redressal of grievances, especially in fiscal statutes, a writ petition should not be entertained bypassing the statutory dispensation. The judgment underscored the importance of following the statutory remedies provided under the law.

In conclusion, the court dismissed all writ petitions, emphasizing the premature nature of the challenges raised and the availability of alternative remedies under the law. The judgment underscored the importance of following the statutory procedures and hierarchy of appeals provided in the Act.

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