2021 (1) TMI 861 - HC - Service Tax

Maintainability of petition - availability of alternative and most efficacious remedy of filing an appeal - appealable order and statutory appeal - Section 86(1) of the Finance Act, 1994 - Violation of principles of natural justice - HELD THAT - There cannot be any doubt that the impugned order is an appealable order and statutory appeal under Section 86(1) of the Finance Act, 1994 lies before the Customs Excise and Service Tax Appellate Tribunal, Bangalore. In the wake of availability of alternate remedy, this Court can entertain the writ petition in a very limited arena. For entertaining writ petition in the wake of alternate remedy, the petitioner has to demonstrate that the order impugned in the writ petition was passed in defiance of the fundamental principles of judicial procedure or in utter violation of principles of judicial justice. Perusal of the impugned order shows that the assessing authority has considered the contentions regarding lack of jurisdiction and has recorded a finding against the petitioner. It is also seen from the impugned order that the judgments cited by the petitioner were taken note of while passing the impugned order. Therefore, it cannot be said that the impugned order is passed violating the principles of natural justice or that the same is contrary to the fundamental principles of judicial procedure, warranting entertainment thereof despite availability of alternate statutory remedy. It cannot be said that despite availability of alternate remedy in filing the appeal, the writ petition needs to be entertained - The writ petition as such is disposed of with liberty to the petitioner to avail alternate remedy.

Summary

Issues:
Challenge to order assigning adjudication, Repeal of Chapter 5 by CGST Act, 2017, Legality of subordinate legislation post-repeal, Consideration of cited decisions in impugned order, Security deposit nature, Availability of alternate remedy for appeal, Writ petition entertainment criteria.

Challenge to order assigning adjudication:
The petitioner challenged an order dated 22/09/2020, arguing that after the introduction of the CGST Act, 2017, Chapter 5 stands repealed, questioning the jurisdiction of assigning adjudication to the 1st respondent. The petitioner contended that the impugned order lacked jurisdiction.

Repeal of Chapter 5 by CGST Act, 2017:
The petitioner argued that after the repeal of the current statute, all subordinate legislation becomes invalid. The petitioner highlighted paragraph 7.5 of the impugned order as illegal, emphasizing the impact of the repeal on the legality of the order.

Legality of subordinate legislation post-repeal:
The petitioner asserted that the impugned order was illegal post-repeal, emphasizing that the decision cited by the petitioner was not considered correctly. The petitioner relied on the judgment in Murli Realtors Pvt. Ltd vs. Commissioner of Central Excise, Pune to support their argument.

Consideration of cited decisions in impugned order:
The petitioner contended that the cited decisions were not considered in the true perspective while passing the impugned order. The petitioner emphasized the importance of properly considering the judgments in the adjudication process.

Security deposit nature:
The petitioner argued that the security deposit received was for recovery of damages and not for any taxable service provision. Referring to paragraph 6.1 of a specific judgment, the petitioner demonstrated that no provision in the Service Tax Law allowed for notional interest on security deposits for leasing immovable properties.

Availability of alternate remedy for appeal:
The respondent argued that even if the contentions raised by the petitioner were accepted, the impugned order would be considered erroneous, suggesting that the matter should be addressed through an appeal rather than a writ petition. The respondent highlighted the statutory appeal available under Section 86(1) of the Finance Act, 1994.

Writ petition entertainment criteria:
The court considered the submissions and perused the impugned order, noting that it was appealable before the Customs Excise and Service Tax Appellate Tribunal. The court emphasized that for a writ petition to be entertained despite the availability of an alternate remedy, the order must violate fundamental principles of judicial procedure or judicial justice. Since the impugned order considered jurisdictional contentions and cited judgments, the court concluded that the writ petition did not need to be entertained, disposing of it with liberty to avail the alternate remedy of filing a statutory appeal.