2021 (8) TMI 1330 - HC - Service Tax

Court Upholds Tax Order on Police Quarters Construction, Emphasizes Appellate Process

The court dismissed the writ petition challenging a service tax order-in-original on construction of police quarters, emphasizing the importance of ... Maintainability of petition - availability of alternative remedy of appeal - writ petitions are filed with a view to avoid pre-deposits to be made in statutory appeals and on the ground that the appellate remedies are time consuming - HELD THAT:- Preferring an appeal is the rule. Entertaining a writ petition before exhausting the appellate remedy is an exception. Undoubtedly, writ proceedings may be entertained before exhausting the appellate remedy. However, it is to be ensured that there is an imminent threat or gross injustice warranting urgent relief to be granted. Mere violation of principles of natural justice is insufficient to entertain a writ proceedings under Article 226 of the Constitution of India, as every writ petition is filed based on one or the other ground stating that the principles of natural justice is violated or statutory requirements are not complied with or there is an illegality or otherwise. Thus, dispensing with an appellate remedy is to be granted cautiously in view of the fact that the very purpose and object of legislation providing an appellate remedy cannot be diluted nor the benefit be denied to the aggrieved person to exhaust the same. The statutory appellate authorities are the final fact finding authorities. Thus, the finding to be made by such appellate authorities with reference to the documents and evidences are of paramount importance for the purpose of exercise of judicial review by the High Court under Article 226 of the Constitution of India. The power of judicial review of the High Court under Article 226 of the Constitution of India is to scrutinize the processes through which a decision is taken by the competent authority by following the procedures as contemplated, but not the decision itself. Therefore, the routine entertainment of a writ petition by dispensing with appellate remedy is not preferable and such an exercise would cause injury to the institutional hierarchy and the importance attached to such appellate institutions. The appellate institutions provided under the statute at no circumstances be undermined by the higher Courts. The appellate forums are the final fact finding authorities and more so, possessing expertise in a particular field. The point of delay may be an acceptable ground for the purpose of entertaining a writ petition. The practise of filing the writ petition without exhausting the statutory remedies are in ascending mode and such writ petitions are filed with a view to avoid pre-deposits to be made in statutory appeals and on the ground that the appellate remedies are time consuming. The petitioner is at liberty to prefer an appeal before the jurisdictional Appellate Authority in the prescribed format and by complying with the provisions of the Act, within a period of four weeks from the date of receipt of a copy of this order - Petition disposed off. Issues:Challenge to order-in-original dated 31-3-2016 regarding service tax on construction of police quarters; Entertaining a writ petition without exhausting appellate remedy; Power of judicial review under Article 226 of the Constitution of India; Importance of fact finding by appellate authorities; Practise of filing writ petitions to avoid statutory remedies.Analysis:The judgment deals with a writ petition challenging an order-in-original related to service tax on the construction of police quarters. The petitioner opted for a writ petition instead of an appeal, citing that the First Appellate Authority had already considered the matter and set aside the tax demand. The court noted that the Original Authority had adjudicated the issues on merits after the matter was remanded. It emphasized that the High Court cannot undertake fact adjudication in writ proceedings and that the Appellate Authority is empowered to handle mixed questions of fact and law.The judgment highlights the role of Appellate Authorities and Tribunals as quasi-judicial bodies responsible for adjudicating factual and legal grounds to resolve disputes. It stresses that the right to appeal should not be bypassed unless there is a compelling reason for urgent relief. The court cautioned against routinely entertaining writ petitions without exhausting appellate remedies, as it could undermine the appellate institutions and the legislative purpose of providing an appellate remedy.Regarding judicial review under Article 226 of the Constitution, the judgment clarifies that the High Court's role is to scrutinize decision-making processes, not the decisions themselves. It underscores the importance of appellate forums as final fact-finding bodies possessing expertise in specific fields. The judgment discourages roving inquiries by the High Court based solely on affidavits, emphasizing the value of fact-finding by appellate bodies for delivering complete justice.Addressing the issue of delay as a ground for entertaining a writ petition, the judgment acknowledges the increasing trend of filing writ petitions to circumvent statutory remedies, particularly due to perceived delays in the appellate process. The court directed the petitioner to prefer an appeal within a specified period, emphasizing that the Appellate Authority must consider the appeal on merits and in accordance with the law, ensuring expeditious disposal.In conclusion, the judgment disposed of the writ petition with directions for the petitioner to pursue the appellate remedy, emphasizing the importance of adhering to statutory procedures and the role of appellate authorities in ensuring comprehensive justice.