2021 (9) TMI 265 - HC - Service Tax

Maintainability of petition - remedy of appeal also available - Order-in-Original or the vires of the Act, is challenged in present case - HELD THAT - Writ Petitions are filed challenging either the Order-in- Original or challenging the vires of the Act. Undoubtedly, those Writ Petitions challenging the vires of the Service Tax Act is pending before the Hon'ble Apex Court of India and before the Hon'ble Division Bench of this Court. However, the Revenue cannot made to suffer for an indefinite period and finally after several years, the petitioners will say that there was an interim stay throughout and therefore, they are not liable to pay the interest. In such circumstances, the Revenue will be put to great hardship and therefore, balancing approach is required in such circumstances, where the litigations are prolonged for a longer period on account of multiplicity of the proceedings or otherwise. In the present case, the petitioner has challenged the Order-in-Original. He has not preferred an Appeal, admittedly against the order. The respondents have demanded the Service Tax amount in the Order-in-Original. The Writ Petition was filed on 27.02.2012. Now, the Writ Petition is pending for more than nine years. Even now, representation is made that the Writ Petition is to be tagged along with the other Writ Petitions, challenging the vires of the Act. This Court is inclined to direct the petitioners to deposit the entire Service Tax amount demanded in the Order-in-Original within a period of four weeks from the date of receipt of a copy of this order - Petition disposed off.

Summary

Issues:
Challenge to Order-in-Original, Failure to prefer Appeal, Prolonging litigation, Balancing approach for Revenue protection, Direction to deposit Service Tax amount.

Analysis:
The petitioner sought to quash Order-in-Original No.54 of 2012 dated 15.02.2012. The order itself mentioned the option to appeal to the Commissioner (Appeals), but the petitioner opted for a writ petition instead of an appeal. The petitioner did not challenge the vires of the Service Tax Act in the writ petition but focused on challenging the specific order issued by the respondent. The court noted the trend of prolonging litigation to gain unjust benefits and emphasized the need for a balanced approach. It highlighted the importance of not making the Revenue suffer due to indefinite delays caused by multiple proceedings or other reasons. The court stressed the distinction between challenging the Order-in-Original and challenging the Act itself, which was already under scrutiny in other pending cases.

The court observed that the petitioner had not preferred an appeal against the Order-in-Original and had filed the writ petition instead. The petitioner had been contesting the matter for over nine years, seeking to tag the case with others challenging the Act's provisions. In the interest of justice and to maintain a balanced approach, the court directed the petitioners to deposit the entire Service Tax amount demanded in the Order-in-Original within four weeks from the date of the order. The court disposed of the writ petition without costs and closed the connected miscellaneous petition. The matter was scheduled for 'Reporting Compliance' on a specified date to ensure the directive's implementation.