2026 (3) TMI 28 - HC - Service Tax

Exclusive appellate remedy to the Supreme Court bars High Court appeals against CESTAT taxability orders; remedy lies to apex court.

An appeal under Section 35G challenging a CESTAT order on taxability is barred where an exclusive appellate remedy to the Supreme Court exists under ... Maintainability of High Court appeal under Section 35G Maintainability of High Court appeal under Section 35G - The appeal before the High Court under Section 35G was not maintainable where the question of service tax liability had been judicially decided and the statutory remedy lies to the Supreme Court. - HELD THAT: - The Court considered rival contentions and relied on authoritative precedents holding that once the question of taxability is judicially determined, an appeal under Section 35G to the High Court is not maintainable and the appropriate statutory remedy is an appeal to the Supreme Court under Section 35L. The Court noted that the impugned CESTAT order recorded that the respondent was not liable to pay service tax for the period in question and that earlier Tribunal decisions on related periods supported that view. Applying the cited decisions, the Court sustained the preliminary objection on maintainability and declined to entertain the appeal on merits. The Court expressly refrained from deciding the substantive taxability issue and granted liberty to the Revenue to approach the Supreme Court under the appropriate provision, including to seek condonation of delay or raise any limitation issues there. [Paras 10, 11] Appeal not maintainable before the High Court; liberty granted to prefer an appeal to the Supreme Court under Section 35L and merits not considered. Final Conclusion: The High Court dismissed the appeal as not maintainable under Section 35G, leaving open the substantive taxability issue and granting liberty to the Revenue to approach the Supreme Court under Section 35L (including for condonation of delay); the Court did not decide the merits. Issues: Whether an appeal under Section 35G of the Central Excise Act, 1944 is maintainable in the High Court against a CESTAT order on taxability where the appellate remedy to the Supreme Court under Section 35L is the exclusive statutory remedy.Analysis: The appeal was filed under Section 35G of the Central Excise Act, 1944 challenging a CESTAT order on service tax liability. Earlier Division Bench rulings of this Court established that where the question relates to taxability and an express statutory appellate remedy to the Supreme Court exists under Section 35L of the Central Excise Act, 1944, an appeal under Section 35G to the High Court is not maintainable. The statutory framework including Section 35G and Section 35L of the Central Excise Act, 1944 and related provisions of the Finance Act, 1994 determine the available remedies and the forum for challenge. The appellate remedy to the Supreme Court under Section 35L is the exclusive remedy for such taxability issues and bars maintainability of a High Court appeal under Section 35G.Conclusion: Appeal under Section 35G of the Central Excise Act, 1944 is not maintainable; the appeal is dismissed.