Service Tax Order Upheld: Procedural Challenge Rejected, Appellants Directed to Seek Remedy Through Tribunal Appeal

The SC dismissed the writ petition challenging a service tax order, finding procedural challenges and allegations of perversity not suitable for judicial review. The court held that the appellants should pursue their remedy through an appeal to the Tribunal, preserving their right to contest the order's factual and legal aspects within 90 days, without prejudicing their substantive rights.

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Issues Involved: Challenge to order demanding service tax and penalty under Section 73(2) of the Finance Act, 1994 read with Section 174 of the CGST Act, 2017; Procedural irregularity in issuance of pre-show-cause notice; Invocation of extended period of limitation; Allegations of perversity in the order in original.

Procedural Irregularity in Pre-Show-Cause Notice:
The appellants challenged the order in original primarily on the ground of procedural irregularity, contending that the pre-show-cause notice was not issued in accordance with the relevant circular. However, it was noted that the appellants had already submitted their reply to the show-cause notice, and this point was not strongly argued during the proceedings.

Invocation of Extended Period of Limitation:
The challenge was also raised regarding the correctness of invoking the extended period of limitation for the proceedings covering the period from April 2014 to June 2017. The appellants argued that as there were two audits conducted by the department prior to the show-cause notice, there was no basis for invoking the extended period. They relied on a previous court decision to support their contention.

Allegations of Perversity in the Order:
The appellants further contended that the order in original displayed perversity on its face as certain documents submitted to the adjudicating authority were not considered, and some were rejected on insufficient grounds like being illegible. This raised concerns about the fairness and thoroughness of the adjudication process.

Court's Decision and Analysis:
The Single Bench dismissed the writ petition, stating that the order in original was appealable under the statute, and the court could not delve into the factual basis for the adjudicating authority's conclusions. The Court observed that the issue of invoking the extended period of limitation involved mixed questions of fact and law, which could not be resolved through a writ petition. Similarly, the allegations of perversity in the order required a detailed examination of facts, best suited for the appellate remedy before the Central Excise and Service Tax Appellate Tribunal.

Conclusion and Dismissal of Appeal:
The Court declined to interfere with the order in original, emphasizing that the appellants should pursue their remedy by filing an appeal before the Tribunal. The appellants were granted liberty to file an appeal within 90 days, ensuring their right to address all issues of fact and law before the Tribunal. The Court's observations were deemed prima facie and would not prejudice the appellants' rights in the appeal process.

Final Verdict and Costs:
The appeal was dismissed, with no costs imposed, and the parties were directed to receive a certified copy of the order promptly upon compliance with legal formalities. All questions of law and facts remained open for consideration in the appellate proceedings.

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