Dismissal of writ petition challenging tax assessment upheld, allowing pursuit of statutory remedies

The court dismissed the writ petition challenging Ext.P2 order, which assessed the petitioner for concealing freight payments subject to service tax, justifying the extended limitation period due to intent to evade tax. The court held that Ext.P2 involved disputed facts and law, unsuitable for Article 226 interference. While dismissing the petition, the court preserved the petitioner's right to pursue statutory remedies, ensuring all contentions could be raised before the appellate authority without prejudice.

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Issues:
Challenge to Ext.P2 order on grounds of limitation and perversity under Article 226 of the Constitution of India.

Analysis:
The petitioner contested Ext.P2 order issued by the 1st respondent covering the financial years 2015-2018, claiming it was time-barred and perverse. The petitioner, engaged in manufacturing edible oil and other products, objected to the tax assessment on payments made to truck owners, arguing the transactions were not taxable and the proceedings were time-barred. Despite objections, the respondent proceeded with a best judgment assessment through Ext.P2. The petitioner's counsel argued that Ext.P2 was perverse and sought intervention under Article 226 of the Constitution of India.

The learned Standing Counsel for the respondents argued that the impugned order was appealable and that the petitioner's contentions involved disputed facts, suggesting that the court should not interfere under Article 226.

Upon review, the court found that the statutory authority concluded in Ext.P2 that the petitioner had intentionally concealed freight payments subject to service tax, indicating an intent to evade tax, thus justifying the extended period of limitation. The court noted that the assessment involved a mix of law and fact, requiring a detailed examination of disputed facts. Section 73 of the Act specifies a time limit for serving notices in cases of short levy or non-payment of service tax, with an extended period of five years in cases of fraud, collusion, wilful misstatement, or suppression of facts. The assessing officer determined there was suppression, warranting the longer period.

The court emphasized that the conclusion in Ext.P2 was based on disputed facts, making it unsuitable for interference under Article 226. Consequently, the writ petition was dismissed. However, the petitioner's right to pursue statutory remedies was preserved, allowing all contentions raised in the petition to be considered by the appellate authority without prejudice from the court's judgment.

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