High Court Rules Only Supreme Court Can Decide on Service Tax Issues, Bound by Section 35L Jurisdiction.

The High Court dismissed the appeal filed under Section 117 of the Central Goods and Service Tax Act, 2017, determining that jurisdiction over the taxability of services rendered by the respondent falls under the Supreme Court as per Section 35L of the Central Excise Act, 1944. The Court emphasized that issues concerning the taxability or excisability of services are within the purview of the Supreme Court, not the High Court, due to the absence of the Appellate Tribunal's constitution. The appellant was granted the liberty to pursue other legal remedies, underscoring the jurisdictional boundaries set by Section 35L.

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Issues:
1. Maintainability of the appeal under Section 117 of the Central Goods and Service Tax Act, 2017.
2. Jurisdiction of the High Court versus the Supreme Court regarding appeals related to taxability of services rendered.
3. Interpretation of Section 35L of the Central Excise Act, 1944 in relation to the determination of taxability or excisability of goods for assessment purposes.

Analysis:

1. Maintainability of the appeal under Section 117:
The appeal was filed under Section 117 of the Act of 2017 against a Final Order passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata. The respondent argued that the appeal was not maintainable under Section 117 as the Appellate Tribunal under the Act of 2017 had not been constituted. The respondent contended that appeals related to taxability issues should be directed to the Supreme Court under Section 35L of the Central Excise Act, 1944. The appellant argued that the services rendered by the respondent fell under Consulting Engineering Services as per the Finance Act, 1994, and therefore, the appeal should be heard on its merits by the High Court.

2. Jurisdiction of the High Court versus the Supreme Court:
The High Court deliberated on the jurisdictional aspect, emphasizing that an appeal under Section 117 of the Act of 2017 lies against orders passed by the Appellate Tribunal. However, the absence of evidence regarding the constitution of the Appellate Tribunal raised doubts on the High Court's jurisdiction. The respondent relied on a Co-ordinate Bench decision to support the argument that appeals concerning taxability issues should be directed to the Supreme Court under Section 35L of the Act of 1944. The High Court considered the core issue of taxability of services rendered by the respondent and concluded that such issues fall within the purview of the Supreme Court under Section 35L.

3. Interpretation of Section 35L of the Central Excise Act, 1944:
The High Court referred to a previous case where the issue of service tax interest and penalty on transportation services was deemed to be under the jurisdiction of the Supreme Court based on Section 35L of the Act of 1944. The Court noted that the determination of taxability or excisability of goods for assessment purposes falls within the scope of Section 35L. In the present case, the High Court determined that the issue of taxability of services rendered by the respondent aligns with the matters falling under the jurisdiction of the Supreme Court as per Section 35L.

In conclusion, the High Court dismissed the appeal, granting the appellant the liberty to seek appropriate legal remedies available. The judgment highlighted the importance of understanding the jurisdictional aspects concerning appeals related to taxability issues and the significance of Section 35L of the Central Excise Act, 1944 in determining the appropriate forum for such matters.

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