High Court dismisses writ petitions challenging service tax exemption denial, directs petitioner to seek remedy before Commissioner.

The High Court dismissed the writ petitions challenging the denial of service tax exemption under Notification No.25/2012-ST. The Court held that the dispute involved mixed questions of facts and law, directing the petitioner to seek remedy before the Commissioner of Central Excise (Appeals) as per the Finance Act, 1994. Emphasizing the availability of alternative remedies, the Court ruled that the writ petitions were not maintainable under Article 226 of the Constitution of India, highlighting the importance of following statutory procedures before approaching the High Court.

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Issues:
1. Denial of exemption of service tax under Notification No.25/2012-ST
2. Interpretation of Clause-12 of the Notification
3. Jurisdiction of the High Court under Article 226 of the Constitution of India

Analysis:

1. The petitioner filed writ petitions challenging the order of the Assistant Commissioner of Central Excise and Service Tax denying the exemption of service tax under Notification No.25/2012-ST. The respondent raised a demand of service tax amounting to Rs. 2,26,323 for the period from April 2013 to March 2015, along with interest and penalty.

2. The petitioner argued that the services provided to the Government are exempt from service tax under the said Notification. The petitioner contended that since they supplied water to a Public Sector Undertaking, they were exempt from payment of service tax under Clause-12 of the Notification. However, the Revenue argued that the Public Sector Undertaking cannot be treated on par with the Government or a Local Authority, and therefore, the petitioner was not entitled to the exemption.

3. The High Court observed that the omitted sub-clause-(a) of Clause-12 of the Notification was in effect from 1.4.2015, whereas the demand raised was for a period prior to this date. The Court held that the dispute raised mixed questions of facts and law, which should be determined by the appellate forums provided in the Act. The Court concluded that the writ petitions were not maintainable, and the petitioner had an alternative remedy before the Commissioner of Central Excise (Appeals) under Section 85 of the Finance Act, 1994.

4. The Court emphasized that there was no lack of jurisdiction or breach of natural justice in the order passed by the Assistant Commissioner. Therefore, the High Court dismissed the writ petitions, stating that the petitioner should avail the remedy before the appellate authority. The Court directed that if an appeal was filed within 30 days, the Appellate Authority would not object to the limitation, provided other conditions for maintaining the appeal were fulfilled.

5. The High Court disposed of the petitions without costs, maintaining that the appellate authority would decide the appeal in accordance with the law. The judgment highlighted the importance of following the statutory procedures and exhausting alternative remedies before approaching the High Court under Article 226 of the Constitution of India.

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