2023 (3) TMI 696 - HC - Service Tax

Maintainability of petition - alternative and efficacious remedy of appeal - Levy of Service Tax - amount paid by the Petitioner to the State of Maharashtra for irrigation restoration charges - whether the writ petition should be entertained, given the availability of the alternative remedy of appeal, as argued by the Respondents? - violation of principles of natural justice.

HELD THAT:- It is well established that the availability of an alternate remedy does not necessarily preclude a writ petition under article 226 of the Constitution of India. The rule of non-interference in writ jurisdiction when an alternate remedy is available, is self-imposed. Whether a writ petition should be entertained in such circumstances depends on various factors.

In the decisions of Godrej Sara Lee [[2023 (2) TMI 64 - SUPREME COURT]] and in Greatship [[2022 (9) TMI 896 - SUPREME COURT]], Supreme Court has made a distinction between the maintainability of the writ petition and the entertainability. In the case at hand, the Respondents do not contend that the Petition is not maintainable, but they contend that it should not be entertained. This objection is based not only on the availability of an alternate remedy, but that factual enquiry is necessary for which appeal is provided under the statute.

Whether the Petitioner's argument presents a purely legal question that can be decided without any further adjudication? - HELD THAT:- The show cause notice was issued based on information received that the Water Resources Department of the State of Maharashtra was collecting non-irrigation charges from various customers for the use of water for non-irrigation purposes. The Respondents contend that the irrigation restoration charges are simply the recovery of costs for the construction of the distribution network. During the investigation, a representative of the Petitioner stated that the irrigation restoration charges were the recovery of costs for the construction of the distribution network.

Whether the services received by the Petitioner way of restoration of the command area, against payment of consideration as non-irrigation charges? - whether the extended period specified in the proviso to sub-section (1) of Section 73 of the Finance Act, 1994, read with Sections 142 & 174 of the CGST Act, 2017, should be invoked for the recovery of the Service tax? - HELD THAT:- Section 83 of the Finance Act, 1994 makes certain provisions of sections of the Central Excise Act, 1944, as in force from time to time applicable in relation to service tax as they would apply in relation to a duty of excise. One of them is Section 35L of the Act of 1944. Section 35L(b) provides that an appeal from any order passed by the Appellate Tribunal relating to, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purpose of assessment would lie to the Supreme Court. Section 35L(2) provides that determination of any question having a relation to the rate of duty shall include the determination of taxability or excisability of goods for the purpose of assessment.

Reliance was placed on the decisions of the Hon'ble Supreme Court in the case of the Coastal Container Transporters Association [[2019 (2) TMI 1497 - SUPREME COURT]]. The petitioner therein sought to distinguish the decision of the Coastal Container Transport Association, submitting that in that case, the petition was filed at the stage of show cause notice and not when the order on show cause notice was passed. The Division Bench did not accept this distinction and found that the writ petition ought not to be entertained. The Division Bench also found that there was no breach of principles of natural justice, and no case was made out. It was held that the Finance Act 1994 provided complete machinery to challenge the order of the assessment in appeals, the last one being before the Supreme Court. This decision is, thus, directly applicable to the case at hand. Further, even assuming that the first appeal would lie in this court and not the Supreme court, this is not a case where writ jurisdiction needs to be entertained when the petitioner has a remedy of a substantive appeal.

There is no patent lack of jurisdiction or complete absence of jurisdictional facts in the impugned order that would allow us to declare that there is no liability upon the Petitioner to pay the service tax. The issue at hand requires adjudication and the applicability of the provisions to the facts is disputed. The Adjudicating Officer had the jurisdiction to decide whether a particular activity attracts service tax or not, and the Petitioner has the option to file a statutory appeal to the Appellate Tribunal where the Petitioner can present all of its contentions. There is no reason why the Petitioner cannot avail of the statutory remedy of appeal - the preliminary objection raised by the Respondents that the writ petition should not be entertained, is upheld.

The Writ Petition is dismissed.