2023 (3) TMI 582 - HC - Service Tax

Unauthorized recovery made without even serving copies of the--adjudication order - Seeking for a direction upon the appellants to-consider the claim of refund, which they made in their-representation dated 28th March, 2022 - case of the-respondents/writ petitioners was that even before the order of-adjudication could be served, by way of attachment a sum of-Rs.29,14,853/- from the bank account of the first respondent-and a sum of Rs.15,43,673/- from the bank account of the-second respondent were swiped off/debited. Whether they could have approached this Court by filing a writ-petition when admittedly their appeal against the order passed-by the Commissioner (Appeals) dated 16th March, 2021 is pending-before the Tribunal? HELD THAT - The prayer-sought for by the respondents/writ petitioners cannot be admitted, though not on-merits but on the ground that they cannot bypass the statutory-remedy, which they have availed and approach this Court as if-this Court is an executing Court while the appeal at the-instance of the respondents is pending before the Tribunal. The learned advocate for the respondents has also-referred to the provisions of Finance Act, 1994 and Section-35F of Central Excise Customs Act. As pointed earlier the-respondents were wholly unjustified in bypassing the remedy-which they have already availed by filing an appeal before the-Tribunal. However, according to the respondents the-Department is not entitled to retain anything over and above-the amount of 10% which was pre-deposited at the time of-filing appeal before the Tribunal. Such a prayer should have-been made before the Tribunal and not by way of writ petition.-More importantly, the prayer sought for in the writ petition-is to consider the representation whereas the direction issued-is a positive direction to effect refund which was-impermissible for the writ Court to do. The appeal filed by the-Revenue is allowed and order passed by the learned writ Court-is set aside. Consequently, the writ petition stands-dismissed.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Consideration of refund claim in a writ petition.
3. Authority to issue a positive direction for refund in a writ petition.

Issue 1: Condonation of delay in filing the appeal
The judgment begins with an application for condonation of delay in filing the appeal, which was allowed by the Court after considering the reasons provided by the appellant and perusing the supporting affidavit. The delay was condoned, and the application was disposed of accordingly.

Issue 2: Consideration of refund claim in a writ petition
The intra-Court appeal by the Revenue was directed against an order related to a refund claim made by the respondents. The respondents had filed a writ petition seeking a direction for considering their refund claim, which was based on unauthorized recovery made before the adjudication order could be served. The Court noted the history of previous appeals and orders related to the case, leading to the representation for refund. The Writ Court allowed the writ petition, directing a partial refund and citing relevant decisions and circulars. The Revenue appealed against this order.

Issue 3: Authority to issue a positive direction for refund in a writ petition
The Court deliberated on whether the respondents could approach the Court through a writ petition while their appeal was pending before the Tribunal. The Court emphasized that the respondents should not bypass the statutory remedy and approach the Court as an executing authority. The respondents' argument regarding the flawed recovery process and contravention of circulars and acts was considered, but the Court ruled that such matters should be addressed before the Tribunal, not through a writ petition. The Court allowed the Revenue's appeal, set aside the writ Court's order, and dismissed the writ petition, granting liberty to file a miscellaneous application before the Tribunal for relief. The Court clarified that all issues would be considered by the Tribunal while deciding on the application.

In conclusion, the judgment addressed the issues of delay condonation, the scope of consideration for refund claims in writ petitions, and the authority to issue positive directions for refunds through writ petitions. The Court emphasized the importance of following statutory remedies and proper legal procedures, directing the parties to pursue appropriate relief through the Tribunal while considering all factual and legal aspects of the case.