2023 (1) TMI 1187 - HC - Service Tax

Court quashes Service Tax demand order, emphasizes legal precedents

Morgan Construction Co. India Pvt. Ltd. (Now merged with Siements Ltd.) Versus The Union of India & Anr.

The court quashed and set aside the order of the Commissioner, CGST & Central Excise, which confirmed the demand of Service Tax on the differential ... Maintainability of petition - availability of alternative remedy of appeal - Respondents had contended that the Petitioner has an alternate remedy under the statute of filing an appeal - Demand of differential service tax - HELD THAT:- The learned Counsel for the Respondent No.2 states that instructions have been taken and the Commissioner who had passed the impugned order has expressed that there was an error in taking view and the decision in the case of M/S GO BINDAS ENTERTAINMENT PVT. LTD. VERSUS COMMISSIONER OF SERVICE TAX, (NOIDA) [2019 (5) TMI 1487 - CESTAT ALLAHABAD] will have to be kept in mind and dealt with, and cannot be ignored. In light of the stand taken by the Respondents, the impugned order will have to be quashed and set aside - Accordingly, the writ petition is disposed of by quashing and setting aside the impugned order dated 29 January 2021 passed by Respondent No.2. The proceeding stands restored to file of Respondent No.2, and it will be decided as per law. Issues:Challenge to order of Commissioner, CGST & Central Excise; Interpretation of relevant case law; Judicial indiscipline; Quashing and setting aside impugned order.Analysis:The Petitioner challenged the order passed by the Commissioner, CGST & Central Excise, Belapur Commissionerate dated 29 January 2021, which confirmed the demand of Service Tax on the differential value for specific periods under the Finance Act, 1994. The Commissioner imposed penalties and confirmed interest on the demands made. The Petitioner sought interference in writ jurisdiction, arguing that the Commissioner's decision contradicted a binding decision of the Tribunal in a specific case and amounted to judicial indiscipline. The Respondents contended that the Petitioner had an alternative remedy of filing an appeal. Subsequently, it was noted that the Commissioner acknowledged an error in not considering the binding case law and expressed the need to address it. As a result, the impugned order was quashed and set aside, with the proceedings restored for reconsideration in light of the correct legal position and observations made.This case involved the crucial issue of the Commissioner's interpretation of relevant case law and the allegation of judicial indiscipline. The Commissioner's failure to follow a binding decision of the Tribunal led to the challenge by the Petitioner, highlighting the importance of adherence to legal precedents and principles. The acknowledgment of the error by the Commissioner and the subsequent decision to reconsider the case in line with the correct legal position demonstrate the significance of upholding legal standards and ensuring consistency in judicial decisions. The resolution of this issue through the quashing of the impugned order and the restoration of proceedings emphasizes the importance of correcting legal errors and ensuring fair and just outcomes in legal proceedings.The judgment also addressed the issue of quashing and setting aside the impugned order. The court, upon considering the arguments presented and the acknowledgment of the error by the Commissioner, decided to quash the order and restore the proceedings for further consideration. This aspect of the judgment reflects the court's commitment to rectifying legal mistakes and ensuring that cases are decided in accordance with the law and established precedents. By setting aside the impugned order, the court upheld the principles of justice and fairness, allowing for a proper review of the matter in light of the correct legal position and observations made during the proceedings.