2021 (8) TMI 43 - HC - Service Tax

Maintainability of petition - availability of alternative remedy of appeal - Section 85 of Finance Act, 1994 read with Rule 8 of Service Tax Rules, 1994 - violation of principles of natural justice - HELD THAT - This Court is of the considered opinion that the importance of an appeal remedy, at no circumstances, be undermined by the High Court and findings of the appellate authority would be of greater assistance for the High Court for exercise of power of judicial review under Article 226 of the Constitution of India. This apart, adjudication of complete facts by the appellate authority based on the original records and evidences are not only important, the legislative intention is to redress the grievances of the aggrieved person. However, such an exercise cannot be undertaken by the High Court in a writ proceedings. In the event of not providing an opportunity to an aggrieved person to exhaust the appellate remedy, undoubtedly the aggrieved person is not only deprived of an opportunity for complete adjudication of the facts and the grounds of law, but there is a possibility of error, commission and omission by the High Court in view of the fact that the High Court is deciding certain facts only based on the facts filed by the respective parties. Preferring an appeal is the rule. Entertaining a Writ Petition before exhausting the appellate remedy is an exception. Undoubtedly, writ proceedings may be entertained before exhausting the appellate remedy - However, it is to be ensured that there is an imminent threat or gross injustice warranting urgent relief to be granted. Mere violation of principles of natural justice is insufficient to entertain a writ proceedings under Article 226 of the Constitution of India, as every Writ Petition is filed based on one or the other ground stating that the principles of natural justice is violated or statutory requirements are not complied with or there is an illegality or otherwise. The power of judicial review of the High Court under Article 226 of the Constitution of India is to scrutinize the processes through which a decision is taken by the competent authority by following the procedures as contemplated, but not the decision itself. Therefore, the routine entertainment of a Writ Petition by dispensing with appellate remedy is not preferable and such an exercise would cause injury to the institutional hierarchy and the importance attached to such appellate institutions - the finding of such appellate forums would be a valuable assistance for the purpose of exercise of judicial review by the High Court under Article 226 of the Constitution of India. The High Court cannot conduct a roving enquiry with reference to the facts and circumstances based on the documents and evidences. Based on the mere affidavits filed by the litigants, the disputed facts cannot be concluded. The petitioner is at liberty to prefer an appeal in the prescribed format and complying with the procedures contemplated under the Act, before the jurisdictional appellate authority within a period of four weeks from the date of receipt of a copy of this order - In the event of filing any such appeal, the appellate authority shall condone the delay, if any, entertain the appeal and dispose of the same on merits and in accordance with law and by affording opportunity to the writ petitioner, as expeditiously as possible. Petition disposed off.

Summary

Issues:
Challenge to Orders-in-Original, Importance of appeal remedy, Entertaining Writ Petition before exhausting appellate remedy, Power of judicial review under Article 226, Significance of fact-finding by appellate forums, Grounds for delay in filing Writ Petition.

Analysis:
The judgment revolves around the challenge posed to Orders-in-Original dated 07.04.2010, 08.11.2011, and 11.01.2010 in the present Writ Petitions. The preamble of the impugned orders highlights the appeal remedy available to aggrieved parties under Section 85 of Finance Act, 1994, emphasizing the importance of following the prescribed procedures for filing an appeal. The Court stresses the significance of the appellate authority's findings in aiding the High Court's exercise of judicial review under Article 226 of the Constitution of India. It underscores that appellate remedy redresses grievances comprehensively, emphasizing the necessity for complete adjudication by the appellate authority based on original records and evidence, a task not suitable for the High Court in writ proceedings.

The judgment clarifies that preferring an appeal is the norm, and entertaining a Writ Petition before exhausting the appellate remedy is an exception, to be granted only in cases of imminent threat or gross injustice. Mere violation of natural justice principles is insufficient to justify bypassing the appellate remedy. The statutory appellate authorities are deemed final fact-finding bodies, and their findings are crucial for the High Court's judicial review. The High Court's role under Article 226 is to scrutinize the decision-making process, not the decision itself, emphasizing that routine entertainment of Writ Petitions without exhausting the appellate remedy undermines the appellate institutions' importance.

The Court highlights that the delay can be a valid ground for entertaining a Writ Petition, cautioning against the increasing trend of filing Writ Petitions to circumvent statutory remedies due to perceived delays. The judgment grants the petitioner the liberty to file an appeal within four weeks, ensuring that any delay will be condoned by the appellate authority. It also allows the petitioner to rely on legal principles settled in a previous judgment by the High Court of Madras for their appeal. Ultimately, the Writ Petitions are disposed of with directions for the petitioner to pursue the appeal route, emphasizing the importance of exhausting statutory remedies for complete justice.