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QUIPPO ENERGY LTD Versus UNION OF INDIA AND 2

2016 (7) TMI 874 - GUJARAT HIGH COURT

Levy of VAT and Service tax both on Supply of tangible goods service - Section 65(105)(zzzzj) of the Finance Act, 1994 - demand of service tax on lease charges received by the assessee - Held that:- Merely because the petitioner argues that not service tax but value added tax would be leviable since the title in the property does not pass on to the lesee would not be a ground to hold that the tax authorities cannot examine and entertain such a contention thus rendering them wholly without jurisd .....

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tatutory remedy. - SPECIAL CIVIL APPLICATION NO. 10560 of 2016 - Dated:- 13-7-2016 - MR. AKIL KURESHI AND MR. A.J. SHASTRI, JJ. FOR THE PETITONER : MR ANAND NAINAWATI, ADVOCATE ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. The petitioner has challenged order-in-original dated 20.01.2016 passed by the Principal Commissioner of Service Tax, Ahmedabad, under which, he has confirmed the proposal in the show-cause notice and held that the petitioner-assessee is providing taxable service wh .....

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such appeal has been filed by the petitioner. It is equally admitted that, against the order of CESTAT, a further tax appeal would be available to the High Court on a substantial question of law. In other words, despite availability of statutory appellate remedy, the petitioner has approached the High Court in this writ petition without first availing such alternative statutory appellate remedy. In this context, we, at the outset, asked the counsel for the petitioner to satisfy us on why we shou .....

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he High Court directly in a writ petition in order to press the question of very jurisdiction of the authority. He lastly contended that, the important question of interpretation of constitutional provisions is involved in the petition and therefore also, the writ petition should be entertained ignoring availability of alternative remedy. In this context, counsel submitted that the petitioner has created a lease in a movable property and the title in the property never vests in the lesee. This i .....

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s carved out by series of judgements of Supreme Court and the High Court, the Court would be persuaded to permit the petitioner to pursue the writ petition directly without insisting on filing the appeal as provided under the statute. 5. In this context, we may refer to the decision of Supreme Court in case of Commissioner of Income Tax and ors vs. Chhabil Dass Agarwal reported in 357 ITR 357, in which, the Court referring to large number of earlier judgements on the question of entertaining a w .....

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ch are repealed or when an order has been passed in total violation of the principles of natural justice, the proposition that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available or statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. We may reproduce the relevant portion of this judgement: 15. Before discussing the fact proposition, .....

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Court must not interfere if there is an adequate efficacious alternative remedy available to the petitioner and he has approached the High Court without availing the same unless he has made out an exceptional case warranting such interference or there exist sufficient grounds to invoke the extraordinary jurisdiction under Article 226. (See: State of U.P. vs. Mohammad Nooh, AIR 1958 SC 86; Titaghur Paper Mills Co. Ltd. vs. State of Orissa, (1983) 2 SCC 433; Harbanslal Sahnia vs. Indian Oil Corpn. .....

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the principles of natural justice, the proposition laid down in Thansingh Nathmal case, Titagarh Paper Mills case and other similar judgments that the High Court will not entertain a petition under Article 226 of the Constitution if an effective alternative remedy is available to the aggrieved person or the statute under which the action complained of has been taken itself contains a mechanism for redressal of grievance still holds the field. Therefore, when a statutory forum is created by law .....

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remedy open to him by an appeal to the Commissioner of Income Tax (Appeals). The remedy under the statute, however, must be effective and not a mere formality with no substantial relief. In Ram and Shyam Co. vs. State of Haryana, (1985) 3 SCC 267 this Court has noticed that if an appeal is from Caesar to Caesar s wife the existence of alternative remedy would be a mirage and an exercise in futility. In the instant case, neither has the assesseewrit petitioner described the available alternate re .....

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the re-assessment orders passed and the consequential demand notices issued thereon. 6. Bearing in mind these observations of the Supreme Court, we would be most reluctant to allow the petitioner to bypass the statutory mechanism provided for dispute resolution. 7. Learned counsel for the petitioner, however, placed heavy reliance on the decision of Supreme Court in case of Bharat Sanchar Nigam Ltd vs. Union of India reported in 2006 (2) S.T.R. 161. Our attention was drawn, in particular, to par .....

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on telecommunication service which was an issue which could not have been raised and decided by the Assessing authorities. This is not the scenario in the present case. Merely because the petitioner argues that not service tax but value added tax would be leviable since the title in the property does not pass on to the lesee would not be a ground to hold that the tax authorities cannot examine and entertain such a contention thus rendering them wholly without jurisdiction. Likewise, reliance pl .....

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s of the Supreme Court to which heavy reliance was placed by the Counsel for the petitioner: Hanumantappa Jamkhandi v. The Union of India and another (1). In Ramjilal s case (2), this Court held that the protection against imposition and collection of tax save by authority of law directly arises from Art. 265 and is not secured by cl. 1 of Art. 31 ; and Art. 265 not being in Ch. III of the Constitution, its protection is not a fundamental right which can be enforced by an application under Art. .....

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