TMI Blog2011 (3) TMI 1410X X X X Extracts X X X X X X X X Extracts X X X X ..... e Respondent. [Judgment per : Sanjiv Khanna, J.]. These four writ petitions have been filed by Interocean Group of Companies/concerns and as common issues/contentions have been raised, they are being disposed of by this common order. For the purpose of convenience, Writ Petition (Civil) No. 9394/2009 filed by Interocean Shipping (I) Pvt. Ltd., is being treated as the lead case. 2. The aforesaid W.P. (C) No. 9394/2009 was filed on 27th May, 2009. Vide order dated 14th July, 2009, notice to show cause was issued in the writ petition and on the interim application, it was directed that the proceedings on the basis of impugned show cause notice could continue but the final order shall not be given effect to without leave of the Court. The said interim order has continued till date. The aforesaid writ petition was amended after the assessment order dated 26th October, 2010 was passed by the Commissioner of Service Tax, Delhi and in the amended writ petition the assessment order has been made subject matter of challenge. It may, however, be noted that in Writ Petition (Civil) Nos. 7773/10 and 7774/10, only show cause notices have been issued but no assessment order has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Act, 2003, whereby sub-section (zzb) to Section 65(105) was enacted. The said clause has to be read with Section 65(19). The aforesaid provisions at the time of enactment were as under :- Section 65(105)(zzb) : any service provided, to a client, by a commercial concern in relation to business auxiliary service. Section 65(19) : business auxiliary service means any service in relation to, -- (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) any service incidental or auxiliary support service such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer, public relation services. and includes services as a commission agent, but does not include any information technology service. 6. The Finance (No. 2) Act, 2004, w.e.f. 10th September, 2004, expanded the scope of Business Auxiliary Services by including activities relating to pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bts, it is hereby declared that for the purpose of this clause.- (a) commission agent means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person, who, while acting on behalf of another person - (i) deals with goods or services or documents of title to such goods or services; or (ii) Collects payment of sale price of such goods or services; or (iii) Guarantees for collection or payment for such goods or services; or (iv) Undertakes any activities relation to such sale or purchase of such goods or services. 7. The question raised by the petitioners is whether they were/are providing business auxiliary services as defined in the aforesaid clauses. It is their contention that they were/are not acting as commission agents. Their activities and earnings cannot be categorized as activities and earnings of a commission agent . It is submitted that the term commission agent was defined by the Finance Act, 2005 w.e.f. June, 2005 and prior to the said date, the definition as per Section 2(aaa) of the Central Excise Act, 1944 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been held to be taxable, regardless of fact that the brokerage was received in foreign currency. We do not think that it will be appropriate and proper for a writ court in the present case to examine and go into the factual aspects about the actual nature of activity provided and undertaken by the petitioners. No doubt, certain questions of law have been raised but first and foremost need and requirement is to have clarity on the facts as to the nature of the transactions and the scope of the activity undertaken by the petitioners on which they have earned brokerage. This may require examination of each transaction on case to case basis. This we feel should be undertaken before the appellate authority i.e. the Tribunal. The statutory appellate remedy should not be allowed to be bye-passed/avoided in the present cases. The petitioners should invoke the said remedy and should not be allowed to circumvent the same. 9. It may be noted here that the petitioners have not challenged the constitutional validity of Section 65(105)(zzb) or 65(19) of the Finance Act as amended from time to time. The questions raised relate to interpretation of the said sections and not constitutional va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o bring out the position well. Lord Widgery, C.J. stated in this case: (All ER pp. 648f-649b) It has always been a principle that certiorari will go only where there is no other equally effective and convenient remedy. * * * The statutory system of appeals is more effective and more convenient than application for certiorari and the principal reason why it may prove itself more convenient and more effective is that an appeal to (say) the Secretary of State can be disposed of at one hearing whether the issue between them is a matter of law or fact or policy or opinion or a combination of some or all of these ... whereas of course an appeal for certiorari is limited to cases where the issue is a matter of law and then only it is a matter of law appearing on the face of the order. * * * An application for certiorari has however this advantage that it is speedier and cheaper than the other methods and in a proper case therefore it may well be right to allow it to be used ... I would, however, define a proper case as being one where the decision in question is liable to be upset as a matter of law because on its face it is clearly made without jur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a fiscal law. Commenting on the exercise of wide jurisdiction of the High Court under Article 226, subject to self-imposed limitation, this Court went on to explain : 7. ... The High Court does not therefore act as a court of appeal against the decision of a court or tribunal, to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon an alternative remedy provided by statute for obtaining relief. Where it is open to the aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in the manner provided by a statute, the High Court nornnally will not permit by entertaining a petition under Article 226 of the Constitution the machinery created under the statute to be bypassed, and will leave the party applying to it to seek resort to the machinery so set up. (emphasis added) The decision in Thansingh is still holding the field. 34. Again in Titaghur Paper Mills Co. Ltd. v. State of Orissa in the background of taxation laws, a three-Judge Bench of this Court apart from reiterating the principle of exercise of writ jurisdiction with the time-honoured self imposed limitations, focused on anoth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tent manifested in the provisions of the Act and would exercise their jurisdiction consistent with the provisions of the enactment. In the concluding portion of the judgment it was further held: (Mafatlal Industries Ltd. case,) (x) ... The power under Article 226 is conceived to serve the ends of law and not to transgress them. 37. In view of such consistent opinion of this Court over several decades we are constrained to hold that even if the High Court had territorial jurisdiction it should not have entertained a writ petition which impugns an order of the Tribunal when such an order on a question of law, is appealable before the High Court under Section 35 of FEMA. In the said case as an appeal under the relevant provisions was maintainable before the High Court and the Supreme Court has held that the Writ Petition should not have been entertained by applying the principle of alternative remedy. 11. Learned counsel for the petitioners, during the course of arguments, had submitted that the petitioners have challenged Letter F. No. 332/41/2008-TRU dated 19th December, 2008 issued by Government of India, Ministry of Finance, Department of Revenue, Tax Research U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was filed by the petitioner when show cause notice was issued and even the assessment order had not been passed. Of course now the assessment order has been passed and after amendment, has been made subject matter of challenge. Similarly, in case of Writ Petition (Civil) No. 12228/2009, the writ petition was filed immediately after the show cause notice was issued and the writ petition was amended after the assessment order was made. In Writ Petition (Civil) No. 7773/2010 and 7774/2010, assessment orders have not been passed and the petitioners have come to the Court on issuance of the show cause notice. It is well settled that the High Courts normally do not entertain writ petitions against issue of show cause notice. Entertaining such petitions is premature, unless vires of a provision is challenged or an exceptional case is made out and to prevent harassment, inference is required. It is not desirable and appropriate to stall enquiry or investigation, even if question of interpretation is involved and this directly or indirectly involves question of jurisdiction of the assessing officer. Resort to writ proceedings is disapproved, unless vires of a statutory enactment is involved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unctionaries specially and specifically constituted for the purpose are not denuded of powers and authority to initially decide the matter and ensure that ultimate relief which may or may not be finally granted in the writ petition is not accorded to the writ petitioner even at the threshold by the interim protection granted. 15. In another case, Union of India v. Kunisetty Satyanarayana, (2006) 12 SCC 28, the Supreme Court has held: 13. It is well settled by a series of decisions of this Court that ordinarily no writ lies against a charge-sheet or show-cause notice vide Executive Engineer, Bihar State Housing Board v. Ramesh Kumar Singh, Special Director v. Mohd. Ghulam Ghouse, Ulagappa v. Divisional Commr., Mysore, State of U. P. v. Brahm Datt Sharma, etc. 14. The reason why ordinarily a writ petition should not be entertained against a mere show-cause notice or charge-sheet is that at that stage the writ petition may be held to be premature. A mere charge-sheet or show-cause notice does not give rise to any cause of action, because it does not amount to an adverse order which affects the rights of any party unless the same has been issued by a person having no jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been passed in the Writ Petition (Civil) No. 12228/2009 and the Writ Petition (Civil) Nos. 7773/2010 and 7774/2010. 18. Petitioners in Writ Petition (Civil) Nos. 9394/2009 and 12228/2009 are required to file an appeal before the Appellate Tribunal. The appellants are given liberty to file appeal within a period of 30 days of receipt of copy of this order. In case the appeal is filed within the said period, the same will not be dismissed/rejected on the ground that they have been filed beyond the period of limitation. The Tribunal will expeditiously hear the appeals and preferably decide the issues involved within a period of six months from the date of filing of the appeals. The interim order passed by this Court will continue till the appeals filed by the petitioners are decided by the Tribunal. In case the petitioners delay the proceedings or ask for adjournments, learned Tribunal will be entitled to modify or even vacate the stay order. 19. In W.P. (C) No. 7773/2010 and 7774/2010, the interim order is modified to the extent that the assessment order, if passed, will not be given effect to for a period of one month from the date it is communicated to the petitioners to en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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