2018 (11) TMI 1161 - HC - Service Tax

Maintainability of petition - alternative remedy of appeal - Held that - Once the petitioner has got efficacious alternative remedy of statutory appeal, the same ought to have been availed by it before invoking the writ jurisdiction of this Court - The writ petition is accordingly disposed of by relegating the petitioner to avail the alternative remedy of appeal under Section 85 of the Finance Act, 1994. Condonation of delay in filing appeal - Held that - Since during the pendency of this writ petition, the time limit to file the appeal has expired, it appears that the prayer of the petitioner for condonation of delay in filing the appeal deserves acceptance - the Appellate Authority is directed that in case the petitioner files an appeal within a period of four weeks from today, the delay in filing the appeal may be condoned and the appeal may be decided on merit and in accordance with law. Condition of pre-deposit - Held that - It would meet the ends of justice, if the petitioner is asked to make such pre-deposit in respect of the liabilities other than the penalty equivalent to the amount of services tax. Consequently, the Appellate Authority shall, on making pre-deposit by the petitioner at the prescribed rate qua the services tax, interest or penalty i.e., other than the penalty equivalent to the services tax, shall decide the appeal on merits. Petition disposed off.

Summary

Issues:
1. Appealability of the impugned order under Section 85 of the Finance Act, 1994.
2. Availability of alternative statutory remedy.
3. Condonation of delay in filing the appeal.
4. Direction regarding pre-deposit requirement for appeal.

Analysis:

1. The High Court considered the appealability of the order dated 31st July, 2018, passed by the Joint Commissioner, Central Goods & Services Tax Commissionerate, Shimla. The respondents argued that the impugned order is appealable under Section 85 of the Finance Act, 1994, as per the forwarding letter attached to the order. The Court acknowledged the statutory appeal provision and held that the petitioner should have availed the alternative remedy of appeal before approaching the writ jurisdiction of the Court.

2. Emphasizing the availability of an efficacious alternative remedy, the Court disposed of the writ petition, directing the petitioner to utilize the appeal mechanism provided under Section 85 of the Finance Act, 1994. The Court highlighted the importance of exhausting statutory remedies before seeking judicial intervention.

3. Acknowledging the possibility of the appeal time limit having expired, the Court granted the petitioner's prayer for condonation of delay in filing the appeal. The Court directed the Appellate Authority to accept the appeal if filed within two weeks, condone the delay, and decide the appeal on merit and in accordance with the law. Additionally, the Court ordered a stay on coercive action against the petitioner for four weeks to allow time for seeking interim relief before the Appellate Authority.

4. Regarding the pre-deposit requirement for the appeal, the Court determined that justice would be served by asking the petitioner to make a pre-deposit concerning liabilities other than the penalty equivalent to the services tax amount. The Appellate Authority was instructed to decide the appeal on merits after the petitioner makes the prescribed pre-deposit related to services tax and interest, excluding the penalty equivalent to the services tax.

In conclusion, the High Court disposed of the petition by directing the petitioner to pursue the statutory appeal process, granted condonation of delay, provided a stay on coercive action, and outlined the pre-deposit requirement for the appeal to be decided on its merits.