2018 (5) TMI 490 - HC - Service Tax

Validity of service tax inquiry summons - Production of documents concerning the enquiry against the first petitioner relating to their liability to pay service tax under the Finance Act, 1994 - case of petitioner is that the first petitioner Board has no liability to pay service tax in respect of its transactions under the Finance Act, 1994 - Held that - the issue to be decided in the said appeals as also in the writ petition is one and the same. In the circumstances, I am of the view that it may not be appropriate to permit the petitioners to raise the said issue collaterally in this proceedings - it would have been appropriate for the petitioners to approach the Appellate Tribunal referred to above for relief in respect of the summons which is impugned in the writ petition. Petition dismissed.

Summary

Issues:
Challenge to summons issued under Section 14 of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 regarding liability to pay service tax by the first petitioner Board.

Analysis:
The judgment revolves around the challenge to a summons issued under Section 14 of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994 concerning the liability of the first petitioner Board to pay service tax. The petitioners contended that the first petitioner Board is not liable to pay service tax under the Finance Act, 1994. However, it was noted that earlier proceedings had been initiated against the first petitioner for the realization of service tax under the Finance Act, 1994. Orders were issued rejecting the contention of the first petitioner regarding their liability to pay service tax. The first petitioner then appealed these orders before the Customs, Central Excise and Service Tax Appellate Tribunal, Bangalore. The appeals are pending, and the issue being considered in both the appeals and the writ petition is the same.

The court observed that the issue in question is pending before the Appellate Tribunal, and it would have been more appropriate for the petitioners to seek relief in that forum. Therefore, the court held that it may not be suitable to allow the petitioners to raise the same issue collaterally in the present proceedings. Consequently, the writ petition was dismissed without prejudice to the right of the petitioners to approach the Appellate Tribunal for suitable relief, if they choose to do so. This decision highlights the importance of following the appropriate legal procedures and forums for addressing specific issues related to tax liabilities and challenges to summons issued under relevant statutes.

This judgment underscores the significance of utilizing the proper legal channels for addressing disputes related to tax liabilities and challenges to official summons. It emphasizes the need for parties to pursue remedies through the relevant appellate authorities rather than raising the same issues in separate proceedings. The decision serves as a reminder of the procedural requirements and the importance of adhering to established legal processes in matters concerning tax obligations and regulatory enforcement actions.