TMI Blog2023 (3) TMI 696X X X X Extracts X X X X X X X X Extracts X X X X ..... hether 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stantive 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. - NITIN JAMDAR AND ABHAY AHUJA, JJ. For the Petitioner Mr. Prakash Shah with Mr. Jas Sanghavi, Mr. Yash Prakash i/b. PDS Legal. For the Respondent: Mr. Pradeep Jetly, Senior Advocate with Mr. Jitendra B. Mishra, Mr. Sham Walve, Ms. Sangeeta Yadav for Respondent Nos.1 to 3. Ms. Jyoti Chavan, Assistant Govt. Pleader for Respondent No. 4 JUDGMENT : (P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission to draw 87,600 million litres of water per year and had not paid any amount toward the proportional cost of the project's capital outlay. On 22 May 2012, an agreement was reached between the State of Maharashtra and India-Bulls Power Ltd (the Petitioner's previous name). As per the agreement, the Petitioner deposited a security amount of Rs. 5,60,640 with the Executive Engineer, Upper Wardha Dam, Amaravati, and agreed to pay water royalty at a higher rate. Regarding the current issue, the Petitioner agreed to pay or had already paid irrigation restoration charges at Rs. 1,00,000/- per hectare. The Agreement stipulated that Rs. 232.18 crores would be paid as irrigation restoration charges every two years, with applicable interest. Furthermore, the State Government permitted the Petitioner to draw 87,600 million litres of water annually for their plant for six years from 22 May 2012. 5. The Petitioner filed Writ Petition No.4968/2015 at the Nagpur Bench of this Court to challenge the application of irrigation restoration charges as per the Government Resolution dated 21 February 2004. By its judgment and order dated 5 May 2016, the Division Bench partially allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, clause No.13 of the concerned Government Resolution mentioned that the expenditure to restore the land irrigation capacity should be computed at Rs.50,000/- per hectare. Clause-10 takes into consideration the total irrigation potential or capacity of the project and loss in that capacity because of the diversion of water for non-irrigational purposes, and accordingly, computation in clause 13 is required to be worked out to compensate for that loss. It was stated that the payment made to the Government of Maharashtra as irrigation restoration charges is not for assigning any rights to use natural resources, but it is a recovery of the expenditure to restore the land irrigation capacity. The Petitioner had failed to pay the required service tax on the irrigation restoration charges, despite being obligated to do so under the provisions of the Finance Act, Service Tax Rules, and Section 174 of the Act of 2017. The show cause notice alleged the Petitioner of contravening these provisions with an intent to evade payment. 8. Accordingly, Petitioner was called to show cause to the Commissioner of CGST as to why the services received by the Petitioner by way of restoration of comma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y-Three only) which was recoverable from the Petitioner under reverse charge under Section 73 of the Finance Act, 1994 along with due interest under Section 75 of the Act. 10. Challenging this order dated 10 December 2022, the Petitioner has filed the present petition. 11. We have heard Mr. Prakash Shah, learned counsel for the Petitioner, Mr.Pradeep Jetly, learned Senior Advocate for Respondent Nos.1 to 3 and Ms.Jyoti Chavan, learned Assistant Government Pleader for Respondent No.4. 12. As stated earlier, preliminary contention is raised by the learned Senior Advocate for Respondent Nos.1 to 3 that the Petitioner has an efficacious alternate remedy in the form of filing an appeal to the Customs Excise and Service Tax Appellate Tribunal under Section 86 of the Finance Act, 1994 and therefore, this Petition filed under Article 226 of the Constitution of India should not be entertained. The Respondents contend that various facts would arise for adjudication, which will have to be dealt with in appeal. The Respondents also contend that in this case, since after the decision is rendered by the Appellate Tribunal, the further appeal would lie before the Supreme Court under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts in detail, and the Adjudicating Authority carefully considered these submissions before arriving at a decision. There is no violation of the principles of natural justice in this regard. 16. 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 considering the present petition, three issues arise for consideration. First, the general principle that writ jurisdiction should not be exercised when a statutory remedy of appeal is available unless exceptional circumstances, such as a breach of principles of natural justice and/or it can be established without detailed scrutiny that the order is patently without jurisdiction. Second, a factual inquiry is necessary to determine the challenge to the impugned order on the ground that jurisdictional facts are not established. Finally, whether this Court should interfere at the stage of the order-in-original when a further appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Titaghur Paper Mills Co. Limited. v/s. State of Orissa 1983 (2) SCC 433, CCE v/s. Dunlop India Ltd. 1985 (1) SCC 260, Punjab National Bank v/s. O.C. Krishnan 2001 (6) SCC 569, CCT. v/s. Indian Explosives Ltd. 2008 (3) SCC 688, City and Industrial Development Corporation v/s. Dosu Aardeshir Bhiwandiwala 2009 (1) SCC 168, Raj Kumar Shivhare v/s. Director of Enforcement 2010 (4) SCC 772. After analysing the law laid down, the Supreme Court opined that the High Court had erred in entertaining the writ petition under Article 226 against the assessment order, bypassing the statutory remedies. The decisions cited by the original petitioner in support of interference in writ jurisdiction were distinguished, stating that the issue was not about the maintainability of the writ petition but its entertainability. The Hon'ble Supreme Court observed that in that case, disputed facts existed, and no valid reason was shown why the assessee bypassed the statutory remedy of appeal. Therefore, it is a consistent view that when an alternate remedy is available, especially in cases involving public revenue, judicial prudence demands that the Court refrain from exercising writ jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e whether to entertain the writ petition or not, and that alternate remedy cannot be an absolute bar to the maintainability of the writ petition as there is no such Constitutional bar. The Supreme Court distinguished between entertainability and maintainability of the writ petition and referred to various decisions regarding this position of law. As for the facts of the case, the Court noted that the litigation had been pending for almost 14 years and proceeded to examine the issue of jurisdiction of the revisional authority on merits regarding the exercise of suo motu powers. The Supreme Court noted that the revisional authority could exercise suo motu power if there was illegality or impropriety in the proceedings before the assessing authority or the orders passed. The Supreme Court found that there was an order of the Tribunal holding field, and the assessing authority was bound by it with no other option but to follow it. The decision of the Tribunal was even binding on the revisional authority. As such, the Supreme Court found no illegality or impropriety and allowed the appeal. The Hon'ble Supreme Court noted that there was a pre-existing order of the Tribunal by w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-irrigation charges (i.e. restoration charges, other than water charges) should not be considered as a service under Section 65B (44) of the Finance Act, 1994 read with Section 142 and 174 of the Act of 2017 and liability to pay Service tax under reverse charge should not be demanded and recovered from the Petitioner; (2) Whether extended period specified in the proviso to sub-section (1) of Section 73 of the Finance Act, 1994, read with Section 142 and 174 of the Act of 2017 should not be invoked for recovery of the Service tax due from the Petitioner; (3) Whether interest is liable to be demanded and recovered under Section 75 of the Act 1994, read with Section 142 and 174 of the Act of 2017; (4) Whether the Noticee is liable for penalty under Section 76, 77(1) and 78 of the Act read with Section 142 and 174 of the Act of 2017. The main issue to be determined was whether the services received by the Petitioner way of restoration of the command area, against payment of consideration as non-irrigation charges, should be considered as a service under Section 65B (44) of the Finance Act, 1994, read with Section 142 174 of the CGST Act, 2017 and the liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport: iii) transport of goods or passengers: or iv) support services, other than services covered under clauses (i) to (iii) above, provided to business entities. *** 65B .. .. .. .. .. (49) Support services means infrastructural, operational, administrative, logistic, marketing or any other support of any kind comprising functions that entities carry out in ordinary course of operations themselves but may obtain as services by outsourcing from others for any reason whatsoever and shall include advertisement and promotion, construction or works contract, renting of immovable property, security, testing and analysis. *** The words support service were later substituted by the words any service with effect from 1 April 2016 by the Finance Act 2015. The Adjudicating Authority had to analyse the factual position in light of various provisions of the Finance Act 1994. Specifically, it had to examine subsection 44 of Section 65B, which defines 'Service', as well as Section 66D, which contains the Negative list of services. Addit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for such payment, unless it is specifically exempted or covered in the mega exemption notification. This finding raised questions regarding the applicability of Circulars issued by the State Government and the interpretation of the Agreement. The nature of the service provided had to be established as a matter of finding of fact, and thus it is evident that the question of whether this activity attracts a service charge or not requires a factual inquiry. 25. The Petitioner has raised several contentions on merits, including those based on Article 243-W of the Twelfth Schedule of the Constitution of India, Section 65B(49) of the Finance Act, and Section 66D of the Finance Act, 1994. Additionally, the Petitioner has cited circulars from the CBSE Education guides dated 20 June 2012 to support the argument on the meaning of support services. However, the question at hand is how these circulars and provisions of law apply to the facts of the case and to determine the liability for service tax. Furthermore, the Petitioner has also referred to a Circular issued by the Tax Research Unit of the Department of Revenue, dated 13 April 2016, regarding service tax on services provided by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en appealed to the High Court or the Supreme Court from the orders of the High Court from refund claims. No decision from any High Court or the Supreme Court that directly answers the issue at hand has been placed before us. Furthermore, no statutory provision exists that ex-facie states that no service tax on the activity in question is leviable. Therefore, it is evident that the issue will have to be examined on its merits, and the appropriate remedy for this is an appeal. 28. The second issue, in this case, concerns whether the extended period specified in the proviso to sub-section (1) of Section 73(1) of the Finance Act, 1994, read with Sections 142 174 of the CGST Act, 2017, can be invoked. The Adjudicating Authority found that the Petitioner intentionally and deliberately suppressed the taxable services from the Respondents and avoided compliance with an intent to evade payment of service tax. However, the issue of whether the extended period can be invoked is intertwined with the first issue regarding tax liability. The Respondents argued that there was a clear service tax liability imposed on the Petitioner, and not paying the service tax would amount to concealment, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service they provided fell under the taxable category of goods transport agency. They relied on circulars issued by the Central Board of Excise and Customs to support their claim. On the other hand, the revenue alleged that the writ petitioners had split the transaction into three parts to evade service tax. In the High Court, the revenue raised preliminary objections regarding the maintainability of the petition, including that the controversy related to the classification of service, and even if the show cause notice resulted in a final order, the appeal would lie before the Supreme Court. The revenue argued that a different position of law would apply from 1 July 2012, when the scheme of service tax changed, and the negative list came into force. However, the High Court overruled these objections and held that the service rendered by the petitioners was classifiable under goods transport agency and not cargo handling service. The Supreme Court disapproved of the High Court entertaining the writ petition, stating that when there was a serious dispute regarding the classification, the High Court should not have entertained the writ petition, especially when the final appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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