2019 (3) TMI 1186 - HC - Service Tax

Cleaning services rendered to the railways under Finance Act, 1994 - demand of service tax with penalty - Mega Notification issued by the Ministry of Finance - interpretation of the notification - Held that - It is well settled law that applicability of the notification has to be examined qua the Clauses of the agreements and related matters. In such scenario entertaining the writ petition would not be justifiable - Without expressing any opinion on the merits or demerits of the case, Writ petition is dismissed with liberty to the petitioner to approach the appellate forum - petition dismissed.

Summary

Issues:
Challenge to tax order on cleaning activity for railway services under Finance Act, 1994.

Analysis:
The petitioner, a partnership firm engaged in cleaning services for railways, challenged a tax order demanding service tax and penalty for cleaning activities on railway platforms and coaches. The petitioner claimed exemption based on Mega Notifications issued by the Ministry of Finance. The respondent issued a show cause notice to tax the cleaning activity, leading to the dispute.

The petitioner argued that services provided to the Government for sanitation conservancy are exempt from service tax as per the Mega Notification. The petitioner also cited a Notification exempting services related to water supply, public health, sanitation conservancy, solid waste management, and slum improvement. Additionally, the petitioner relied on a judgment by the Customs, Excise & Service Tax Appellate Tribunal.

The Revenue contended that the writ petition was not maintainable due to the availability of an alternative statutory remedy of appeal under the Finance Act, 1994. The interpretation of the Notifications and agreements between the petitioner and railways were deemed factual aspects to be determined by the appellate forum.

The High Court noted that the dispute centered on the interpretation and application of the Mega Notifications issued by the Ministry of Finance. The Court emphasized that these aspects involved mixed questions of fact and law, necessitating adjudication by the appellate forum provided under the statute.

Referring to relevant legal precedents, the Court highlighted the importance of not bypassing statutory remedies and encouraged approaching the appellate forum for resolution. The Court dismissed the writ petition, granting the petitioner liberty to appeal to the appropriate forum within a specified timeframe, subject to fulfilling prescribed procedures. The Court directed the refund of any deposited amount to the petitioner.

In conclusion, the High Court dismissed the writ petition, emphasizing the need to address the dispute through the appellate forum rather than under writ jurisdiction. The judgment underscored the significance of following statutory procedures and seeking resolution through the appropriate legal channels.