2018 (10) TMI 1565 - HC - Service Tax

Commissioner of Service Tax Appeals rebuked for judicial breach in tax refund case. Order quashed, Rs. 1 lakh fine imposed.

XL Health Corporation India Pvt. Ltd. Versus The Union of India, Deputy Commissioner Service Tax, Division-III Service Tax-I, Commissionerate

The Court condemned the Commissioner of Service Tax (Appeals) for breaching judicial discipline by ignoring a previous Tribunal decision in a case ... Refund of tax - export of services - Lack of judicial discipline - Held that:- In the impugned order, the first appellate authority throwing to the winds, the principles of judicial discipline and binding order passed by higher appellate forum, not only reiterated his own stand, which were set aside by the Tribunal but the same is sought to be defended by the Department with the aforesaid words quoted above. The total callous, negligent and disrespectful behaviour shown by the Departmental authorities in this Court should not be tolerated at all. It is this kind of lack of judicial discipline which if it goes unpunished, will lead to more litigation and chaos and such public servants are actually a threat to the society. The cost is quantified at ₹ 1 lakh (Rupees One Lakh only) to be deposited by Mr.Suresh Kumar, Commissioner of Service Tax (Appeals) from his personal funds with the Registrar General of this Court. The impugned order apparently flies in the face of the higher Tribunal’s order dated 23.03.2017 and therefore cannot be sustained. The writ petition therefore clearly deserves to be allowed with exemplary costs. Issues:Challenge to order dated 09.06.2017 by Commissioner of Service Tax (Appeals) | Claim of refund of tax on export of services | Breach of judicial discipline by Commissioner of Service Tax (Appeals) | Statement of Objections filed by Respondent-Department | Lack of judicial discipline by Departmental authorities | Failure to file correct Affidavit | Request for more time to file Affidavit | Quashing of impugned order dated 09.06.2017 | Imposition of costs on Commissioner of Service Tax (Appeals) | Directions for refund request consideration.Analysis:The petitioner, XL Health Corporation India Pvt. Ltd., challenged the order dated 09.06.2017 by Commissioner of Service Tax (Appeals) regarding the refund of tax on export of services. The CESTAT had previously set aside the Commissioner's order for the earlier period, emphasizing the inapplicability of the doctrine of unjust enrichment in export of services. Despite this, the Commissioner repeated his earlier stand in the impugned order dated 09.06.2017, breaching judicial discipline by ignoring the Tribunal's decision. The Respondent-Department's Statement of Objections displayed audacity by dismissing the need for a hearing as a time-wasting tactic.In a scathing critique, the Court condemned the Department's disregard for judicial discipline, warning against such behavior leading to increased litigation and chaos. The Court noted the failure of the Revenue to file the correct Affidavit despite a month's lapse, highlighting the lack of accountability. The Respondent's request for more time to file the Affidavit after the officer's transfer was deemed insulting, further undermining the seriousness of the situation.The Court, recognizing the Commissioner's blatant disregard for the Tribunal's order, quashed the impugned order dated 09.06.2017 and imposed costs of Rs. 1 lakh on the Commissioner to be deposited within a month. Failure to comply would result in disciplinary action. The Court directed the petitioner to approach the concerned Commissioner for a fresh refund request in line with the Tribunal's order, emphasizing the need for timely and lawful consideration within three months.