2026 (2) TMI 183 - SCH - Service Tax

Interpretation of 'where it is possible to do so' in Finance Act appeals; SLP dismissed, statutory appeal permitted.

The court construed the statutory phrase 'where it is possible to do so' in the Finance Act provision to permit relegation of the applicant to an ... Interpretation of statutory phrase 'where it is possible to do so' - Relegation to alternative appellate remedy - Permissibility of filing statutory appeal after dismissal - Entitlement of Appellate Authority to decide appeals on merits - Dismissal of Special Leave Petition - HELD THAT:- We do not find any valid grounds to interfere with the view taken by the High Court in the impugned order. The Division Bench of the High Court has correctly interpreted the expression “where it is possible to do so” found in Section 73(4B)(b) of the Finance Act, 1994, and interpreted in paragraphs 4 and 5 of the impugned order. In our view, the High Court has also correctly relegated the petitioner to avail the appellate remedy before the Appellate Authority in terms of the provisions referred to in para 6 of the impugned order. Consequently, we dismiss this special leave petition leaving it open for the petitioner to avail the alternative remedy as permitted by the High Court. The petitioner is permitted to file the statutory appeal within a period of four weeks. If any such appeal is filed, the Appellate Authority shall entertain the appeal on merits. Issues: (i) Whether the High Court correctly interpreted the expression 'where it is possible to do so' in Section 73(4B)(b) of the Finance Act, 1994 and thereby relegated the petitioner to the appellate remedy; (ii) Whether the petitioner should be permitted to file the statutory appeal and whether the Appellate Authority may decide the appeal on merits.Issue (i): Whether the High Court's interpretation of the phrase 'where it is possible to do so' in Section 73(4B)(b) of the Finance Act, 1994 is correct and supports relegation to the statutory appellate remedy.Analysis: The impugned order construed the statutory phrase in the context of available alternative remedies and applied that construction in paras 4 and 5 of the impugned order. The approach involved assessing the availability and appropriateness of the statutory appellate mechanism under the Finance Act, 1994 and holding that the statutory route ought to be pursued where feasible.Conclusion: The High Court's interpretation is upheld and the petitioner is relegated to pursue the statutory appellate remedy.Issue (ii): Whether the petitioner should be permitted to file the statutory appeal and whether the Appellate Authority is entitled to decide the appeal on merits.Analysis: Permission was granted to file the statutory appeal within a limited period in view of the facts and to remove any procedural impediment. The Appellate Authority was clarified to have the power to entertain and decide the appeal on merits in accordance with law notwithstanding a coordinate bench order in a different matter.Conclusion: The petitioner is permitted to file the statutory appeal within four weeks and the Appellate Authority shall entertain and decide the appeal on merits.Final Conclusion: The special leave petition is dismissed, with the petitioner relegated to the statutory appellate remedy and granted limited time to file the appeal, and the Appellate Authority authorised to decide the appeal on merits.Ratio Decidendi: Where a statutory appellate remedy is available and can be invoked, courts will refrain from granting extraordinary relief and will require exhaustion of the statutory remedy; an appellate authority may be permitted to decide such appeal on merits when procedural accommodation is directed by the Court.