Healthcare Provider Must Appeal Service Tax Demand; Court Dismisses Petition, Cites Alternative Remedy Availability.

The HC dismissed the writ petition challenging the service tax demand and penalties imposed by the Principal Commissioner, GST and Central Excise, Guwahati, on a healthcare service provider. The Court recognized the potential errors in the impugned order but found it not wholly without jurisdiction. Emphasizing the availability of an alternative remedy under the Goods and Services Tax Act, 2017, the Court directed the petitioners to seek recourse through the appellate authority. The period from the filing date to the order date was considered a bona fide pursuit of remedy, and no costs were awarded.

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Issues:
The issues involved in the judgment are the quashing of an order-in-original dated 13.12.2022, passed by the Principal Commissioner, GST and Central Excise Commissionerate, Guwahati, regarding the demand of service tax, interest, and penalties on a company providing healthcare services.

Details of the Judgment:

Issue 1: Exemption from Service Tax
The petitioners, a clinical establishment providing healthcare services, challenged the demand of service tax amounting to Rs. 23,82,02,812/- for the financial year 2016-17. They claimed exemption from service tax under relevant notifications. The respondent rejected the contention and confirmed the demand, citing suppression of facts and non-filing of returns. The respondent imposed penalties and directed payment within a specified period.

Issue 2: Compliance with Legal Procedures
The petitioners argued that the show-cause notice did not adequately inform them of the respondent's intentions and that the impugned order did not address the exemption from service tax in a lawful manner. The respondent, however, contended that all issues were addressed in the impugned order, which extensively referred to statutory provisions. The petitioners sought interim relief, while the respondent suggested availing the remedy under the Goods and Services Tax Act, 2017 before the appellate authority.

Judicial Analysis:
The Court noted that the impugned order had considered the petitioners' submissions, including the issue of limitation, non-disclosure of correct taxable value, and failure to respond to communications regarding tax liability. While acknowledging potential errors in the order, the Court concluded that it was not wholly without jurisdiction. The Court highlighted the availability of an alternative and efficacious remedy under the Goods and Services Tax Act, 2017, and dismissed the writ petition without issuing notice to the respondents.

Conclusion:
The Court dismissed the writ petition, emphasizing the availability of an alternative remedy before the appellate authority. The petitioners were granted the period from the filing date till the order date as a bona fide pursuit of remedy. No costs were awarded in the matter.

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