Writ petition challenging indirect tax order faces alternative CESTAT appeal route; withdrawn with time to appeal and pre-deposit

The dominant issue was maintainability of a writ petition in view of an efficacious alternative statutory remedy of appeal to CESTAT. Applying the principle that writ jurisdiction is ordinarily not invoked where an adequate appellate forum exists, the HC declined to examine the merits and expressly kept all contentions open for adjudication by CESTAT. The petition was dismissed as withdrawn, with liberty to the petitioners to file an appeal within two weeks and to comply with the statutory pre-deposit requirement within three months.

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1. ISSUES PRESENTED AND CONSIDERED

1. Whether the writ petitions should be permitted to be withdrawn to enable the petitioners to pursue the statutory alternative remedy of appeal under the Finance Act, 1994, with liberty and time-bound directions for filing such appeals.

2. Whether, upon withdrawal of the writ petition challenging an order-in-original appealable to the Tribunal, the Court should grant time to comply with the statutory pre-deposit requirement and condition the Tribunal's hearing of the appeal upon compliance within the specified time.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Withdrawal of writ petitions with liberty to pursue statutory appeals and time for filing

Interpretation and reasoning: The Court noted the petitioners' express desire to avail the alternative statutory appellate remedies and withdraw the pending writ proceedings. Accepting the prayer, the Court structured the withdrawal orders to preserve the petitioners' ability to pursue appeals, by granting liberty and fixing a limited period within which the appeals must be filed.

Conclusions: The Court dismissed both writ petitions as withdrawn and granted liberty to file statutory appeals. For the writ petition relating to an appeal to the Tribunal, the Court allowed filing of the appeal within two weeks. For the writ petition relating to appeals under Section 85 against three specified orders-in-original, the Court similarly granted liberty to file appeals within two weeks.

Issue 2: Time to satisfy statutory pre-deposit and conditionality for hearing of the Tribunal appeal

Legal framework (as discussed): The Court proceeded on the basis that the proposed appeal to the Tribunal would be subject to the statutory pre-deposit requirement of 7.5% of the impugned demand for service tax, and addressed the petitioners' request for time to meet that condition.

Interpretation and reasoning: Although an initial prayer sought a direction that the Tribunal hear the appeal without insisting on the 7.5% pre-deposit, the petitioners expressly did not press that relief and instead sought time to comply. Considering that the writ petition had been pending since 2020, the Court deemed it proper to allow an opportunity to make the statutory pre-deposit within a defined period, while ensuring that the Tribunal's hearing would remain contingent upon timely compliance.

Conclusions: The Court granted three months' time to make the statutory pre-deposit, clarified that the Tribunal shall proceed to hear the appeal only if the pre-deposit is made within that three-month period, and expressly left all merits open for determination by the Tribunal in accordance with law.

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