Court dismisses challenge to service tax recovery order, directs appeal to appellate authority.

The court dismissed the petition challenging the order for recovery of service tax, emphasizing the availability of an alternative remedy before the appellate authority. The court declined to interfere, noting the Revenue's consistent stance in similar cases and pending consideration of the issue by the Supreme Court. The petitioner's unique status was deemed insufficient for court intervention, with the court directing the petitioner to pursue the statutory appeal within four weeks without addressing the issue of limitation.

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Issues Involved:
1. Challenge to the order dated 21st December 2016 by the Commissioner, Service Tax, Mumbai.
2. Availability and appropriateness of alternative remedy under the Finance Act, 1994.
3. Alleged discrimination in the treatment of similarly placed entities.
4. Merits of the impugned order regarding the collection of service tax.

Issue-wise Detailed Analysis:

1. Challenge to the Order Dated 21st December 2016:
The petitioner challenged the order dated 21st December 2016, issued by the Commissioner of Service Tax, Mumbai, under Article 226 of the Constitution of India. The impugned order pertained to the recovery of service tax under the Finance Act, 1994.

2. Availability and Appropriateness of Alternative Remedy:
The court noted that there was an alternative remedy available under the Act to challenge the impugned order before the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT). The court expressed a prima facie inclination not to interfere with the impugned order in its writ jurisdiction, emphasizing the availability of an efficacious alternative remedy as a self-imposed limitation on exercising writ jurisdiction.

3. Alleged Discrimination in Treatment:
The petitioner argued that other Railway Corporations, similarly constituted and involved in the same activities, had their notices for recovery of service tax withdrawn. Specifically, the petitioner referred to the order dated 25th January 2016 by the Commissioner of Service Tax, Delhi, in favor of M/s. Bharuch Dahej Railway Co. Ltd. The petitioner contended that they should be treated equally under the fundamental requirement of the Rule of Law. However, the court observed that the Revenue had not accepted the Tribunal's decision in similar cases and was in the process of appealing against them, indicating a consistent stance by the Revenue.

4. Merits of the Impugned Order Regarding Collection of Service Tax:
The petitioner argued that the entire freight amount had already been taxed by the Railways, and the Revenue was now seeking to tax a part of the same amount again. The petitioner urged that the unique status of their shareholding pattern, entirely distributed between the Central and State Governments, and their operation under the Ministry of Railways warranted the court's intervention. However, the court held that the status of the petitioner could not be a basis for exercising discretion to entertain the writ. The court emphasized that the action of the authority being without jurisdiction, rather than the status of the party, should be the basis for exercising discretion.

The court also noted that the issue was still pending consideration before the Supreme Court in the case of Mudra Port & Special Economic Zone Ltd., and the Revenue was contesting the issue uniformly across different cases. Consequently, the court found no justification to interfere with the impugned order dated 21st December 2016.

Conclusion:
The court dismissed the petition, directing the petitioner to approach the appellate authority by filing a statutory appeal under the Act. The court also condoned the delay in filing the appeal if done within four weeks, considering the petitioner was bona fide prosecuting the writ petition. The petition was disposed of with the direction that the Tribunal should consider the appeal on merits without addressing the issue of limitation.

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