High Court dismisses Writ Petition challenging service tax on composite contract, emphasizes appeal remedy.

The High Court dismissed the Writ Petition challenging a service tax demand on a composite contract, emphasizing the need to exhaust the appeal remedy before invoking extraordinary jurisdiction under Article 226. The Court held that service tax could be levied on both service and materials in such contracts and that the case involved factual complexities, not just legal issues. The petitioner's failure to pursue the appeal route rendered the Writ Petition not maintainable, leading to its dismissal without costs.

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Issues: Jurisdiction of levying service tax on composite contract involving material supply and service; Maintainability of Writ Petition without exhausting alternate remedy of appeal.

Jurisdiction Issue:
The judgment pertains to a Writ Petition challenging an order confirming service tax demand, interest, and penalty. The petitioner argued that service tax can only be levied on the service portion of a composite contract, not on materials, citing a Supreme Court decision. The petitioner sought relief under Article 226 of the Constitution. However, the Court noted that extraordinary jurisdiction can be invoked only when no effective alternate remedy exists. The Court found the case involved intricate factual issues, not pure questions of law, and dismissed the Writ Petition, emphasizing the need to exhaust the appeal remedy.

Maintainability of Writ Petition:
The petitioner bypassed the alternate remedy of filing an appeal before the Commissioner (Appeals-I) and directly approached the High Court through the Writ Petition. The Court highlighted that exceptional cases warranting Article 226 intervention are rare and subject to the availability of an adequate alternate remedy. The Court emphasized that the present case did not meet the criteria for invoking extraordinary jurisdiction under Article 226. Consequently, the Writ Petition was dismissed as not maintainable, with no costs imposed, and the connected Miscellaneous Petition was closed.

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