Court dismisses writ petition challenging service tax demand order, directs appeal under Finance Act

The Court dismissed the writ petition challenging a service tax demand order, ruling that the petitioner's argument did not warrant invoking its writ jurisdiction. The Court highlighted the availability of an appeal remedy under Section 85 of the Finance Act, 1994, directing the petitioner to pursue the statutory route. It granted a three-week stay on coercive action but warned that failure to file an appeal would result in the stay being lifted. The Court concluded by disposing of the petition without awarding costs, closing any pending applications to conclude the legal proceedings.

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Issues:
Challenge to legality and validity of order-in-original dated 30.07.2021 regarding service tax demand, interest, and penalty under Section 73(2) of the Finance Act, 1994 and Section 174(2) of the Central Goods and Services Tax Act, 2017.

Analysis:
The petitioner challenged the order-in-original passed by the Assistant Commissioner of Central Tax, confirming a service tax demand of Rs. 40,74,805.00, along with interest and penalty. The challenge was based on the argument that the assessment had become time-barred, and there was no justification for passing the assessment order under the extended period of limitation. It was contended that non-filing of return should not be a ground for extending the limitation period.

Upon hearing the arguments from both sides and examining the materials on record, the Court held that the ground raised by the petitioner was not sufficient to invoke its writ jurisdiction under Article 226 of the Constitution of India. The Court noted that there was a statutory alternative remedy available in the form of an appeal under Section 85 of the Finance Act, 1994. Therefore, the Court declined to entertain the writ petition and directed the petitioner to approach the appellate forum as provided by the statute.

To facilitate the filing of the appeal, the Court ordered that no coercive action shall be taken against the petitioner for a period of three weeks. However, the Court cautioned that if no appeal was filed within the specified period, the stay order would automatically be vacated. The Court also mentioned that after the specified period, the Appellate Authority would have the discretion to decide on granting or denying a stay, without expressing any opinion on the merit of the case.

Finally, the Court disposed of the writ petition, stating that no costs were to be awarded. Any pending miscellaneous applications were to be closed as well, bringing the legal proceedings to a conclusion.

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