High Court dismisses writ petition challenging service tax levy by Assistant Commissioner. Appeal rejected, construction activities not exempt.

The High Court dismissed the appellant's writ petition challenging the levy of service tax by the Assistant Commissioner of Central Excise. Despite acknowledging the availability of an appeal remedy, the court allowed the appellant to pursue the appeal due to jurisdictional issues. However, the court ultimately rejected the appeal, finding the appellant's construction activities for the Tamil Nadu Civil Supplies Corporation were profit-oriented and did not qualify for exemption based on the corporation's operational model. The appeal was dismissed without costs, and the connected application was closed.

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Issues:
1. Dismissal of writ petition after long pendency.
2. Challenge to orders passed by Assistant Commissioner of Central Excise.
3. Applicability of service tax on the appellant.
4. Availability of alternative remedy of appeal.
5. Jurisdictional issue of levy of service tax.
6. Justification for filing the writ petition.
7. Entitlement to appeal despite delay.
8. Nature of activities of Tamil Nadu Civil Supplies Corporation.
9. Benefit of 'No profit No loss' basis to the appellant.

Analysis:
1. The appellant contended that the writ petition was dismissed after a long pendency, raising a legal issue regarding the liability for service tax. The orders passed by the Assistant Commissioner of Central Excise were challenged, emphasizing statutory provisions under the Finance Act and the nature of the appellant's activities under an agreement with the Tamil Nadu Civil Supplies Corporation.

2. The learned Single Judge dismissed the writ petition citing the availability of an alternative remedy through an appeal. The appellant argued that since the issue was jurisdictional, challenging the very levy of service tax, the writ petition was rightly filed. The delay in hearing the petition should not bar it, especially considering exceptions to the alternative remedy principle as per Supreme Court decisions.

3. The High Court acknowledged the availability of the appeal remedy but noted the appellant's argument that the delay in disposal was not solely their fault. The court emphasized that the determination of liability for service tax was a factual matter based on the contract agreement and supporting documents.

4. The court found no error in allowing the appellant to pursue the appeal, even after a significant delay, with the benefit of extended limitation. While not commenting on the extension of the limitation period, the court was not convinced about the nature of activities forming the basis of the challenge to the orders.

5. Regarding the activities of the Tamil Nadu Civil Supplies Corporation, the court observed that operating on a 'No profit No loss' basis did not automatically benefit the appellant, a contractor engaged in construction work for the corporation. The court emphasized that the appellant's construction activities were not charitable but contractual for profit, distinct from the corporation's operational principles.

6. Ultimately, the court rejected the appeal, finding no merit in the challenge to the service tax liability. The appellant's construction work for the corporation was deemed a profit-oriented contract, not qualifying for exemption based on the corporation's operational model. The appeal was dismissed without costs, and the connected application was closed.

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