2023 (2) TMI 235 - HC - Service Tax

Limitation Challenge Dismissed in Tax Demand Dispute

The Court dismissed the petition challenging a demand raised by respondent no.1, amounting to Rs. 5,19,748, including service tax and penalty, on grounds ... Maintainability of petition - availability of alternative remedy of appeal - petitioner claims that the demand was raised beyond the period of one year, as stipulated under Section 73(4B) of the Finance Act, and therefore, is barred by limitation - HELD THAT:- The petitioner contends that there is no ground whatsoever in the impugned order, which could be read to indicate that it was not possible for the concerned authority to pass the order within the period as stipulated under Section 73(4B) of the Finance Act. Thus, the impugned order is barred by limitation. The petitioner also seeks to contest the demand on merits. Although, prima facie, the contention advanced by the petitioner appears merited, however, the petitioner has an equally efficacious alternate remedy. This Court does not consider it apposite to entertain the present petition. The same is disposed of with liberty to the petitioner to avail alternate remedies. Issues:1. Impugning an order dated 20.12.2022 passed by respondent no.1 raising a demand of Rs. 5,19,748/- including service tax and penalty.2. Whether the demand raised beyond the period of one year, as stipulated under Section 73(4B) of the Finance Act, is barred by limitation.3. Availability of an alternate efficacious remedy for the petitioner.Analysis:1. The petitioner challenged an order passed by respondent no.1 on 20.12.2022, raising a demand of Rs. 5,19,748/- including service tax and penalty. The petitioner contended that the demand was beyond the period of one year, as prescribed under Section 73(4B) of the Finance Act, and therefore, should be considered time-barred. The petitioner also raised objections on the merits of the demand.2. The impugned order rejected the petitioner's contention on limitation, stating that the investigation was initiated earlier, and the petitioner did not cooperate during the investigation stage. The order highlighted that despite repeated letters and summons, the petitioner did not provide relevant documents, leading to the issuance of the show cause notice under Section 73 of the Finance Act. The order concluded that the petitioner's contention of limitation was not tenable.3. The Court acknowledged the petitioner's prima facie merited contention on limitation but noted the availability of an alternate efficacious remedy for the petitioner. Considering the existence of such a remedy, the Court decided not to entertain the present petition and disposed of it, granting the petitioner the liberty to pursue alternate remedies. All rights and contentions of the parties were reserved for further proceedings.This detailed analysis of the judgment provides insights into the issues raised by the petitioner, the reasoning behind the impugned order, and the Court's decision regarding the availability of alternate remedies for the petitioner.