2012 (12) TMI 850 - HC - Service Tax

Writ of Certiorari - Business Auxiliary Service - demand of service tax, Interest thereon and penalty - invoking extended period of limitation - Held that - As the petitioner does not plead violation of principles of natural justice, lack of jurisdiction or that the impugned order has been passed in an arbitrary and capricious manner by the authority but on the interpretation of the various provisions based on factual issues in the case. It is trite law that this court under Article 226 of the Constitution will not be a court of appeal or examine for itself the correctness of the decision impugned and decide what is the proper view to be taken or the order to be made. As decided in Veerappa Pillai vs Raman and Raman Limited 1952 (3) TMI 31 - SUPREME COURT that where matter involves disputed questions of fact or mixed question of law and fact or even ordinary question of law, it could be raised in appeal provided under the statute. See also Sohan Lal vs. Union of India 1957 (3) TMI 45 - SUPREME COURT , Basant Kumar v. Eagle Rolling Mills (1964 (2) TMI 73 - SUPREME COURT) & Thansingh vs. Superintendent of Taxes 1964 (2) TMI 79 - SUPREME COURT . Therefore prima facie this court is not inclined to interfere with the order at this stage. As a result the petitioner has to pursue the alternative remedy provided under the Act. Writ Petition stands disposed.

Summary

Issues:
1. Validity of the order passed by the Commissioner of Customs and Central Excise under the provisions of Service Tax, Finance Act 1994.
2. Interpretation of the various provisions based on factual issues in the case.

Analysis:
Issue 1: The petitioner filed a Writ Petition seeking to quash the order passed by the Commissioner of Customs and Central Excise under the provisions of Service Tax, Finance Act 1994. The Commissioner issued a show-cause notice alleging that the petitioner had failed to pay service tax on services provided for the promotion or marketing of goods produced by their clients. After a full-fledged adjudication, the authority found the petitioner liable to pay service tax under the category of "Business Auxiliary Service." The authority confirmed the demand for service tax, interest, and penalties. The petitioner challenged the order on various factual and legal grounds, contending that their submissions were not adequately considered. However, the court noted that it would not act as a court of appeal and interfere with the order, emphasizing that the petitioner should pursue the alternative remedy provided under the Act, i.e., an appeal to the Appellate Tribunal.

Issue 2: The petitioner's counsel primarily argued on the interpretation of various provisions based on factual issues in the case. The court cited legal precedents to establish that under Article 226 of the Constitution, the court does not function as an appellate court to review the correctness of decisions unless there are violations of natural justice, lack of jurisdiction, or arbitrariness in the authority's actions. The court highlighted that matters involving disputed questions of fact or mixed questions of law and fact should be raised in an appeal as provided under the statute. Therefore, the court indicated a reluctance to interfere with the order at that stage, directing the petitioner to pursue the available appellate remedy.

In conclusion, the Writ Petition was disposed of without costs, and the court emphasized the importance of exhausting the alternative remedy of appeal to the Appellate Tribunal. The judgment underscored the limited scope of judicial review under Article 226 and the significance of following the statutory appeal process in challenging administrative orders.