TaxTMI 
TaxTMI 
2017 (6) TMI 1332
X X X X Extracts X X X X
X X X X Extracts X X X X
....e amount which the Petitioner has received as an outcome of an arbitration dispute decided by the International Court of Arbitration by mutual consent be not treated as taxable for the purpose of calculating service tax. 2. The Petitioner is assailing the said show cause notice on the ground that the respondent authorities have erred in law inasmuch as the said amount which the Petitioner has received is by virtue of a settlement out of Court in an arbitration dispute. According to the petitioner, the said amount is not any consideration for the services rendered but is the compensation for the breach of contract at the hands of the company based at Finland, namely, M/s Outotec (Filters), Ove (Finland). 3. Contention of the learned Co....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he arbitration dispute is leviable of service tax it would be a futile exercise if the Petitioner is made to approach the authorities by submitting their reply to the show cause notice. That they may also be faced with the deterrent of the clause of pre- deposit in the event of an appeal to be preferred and thus prayed for the petition to be entertained on merits. 4. Learned Counsel for the Petitioner relies upon the judgment of the Hon'ble Supreme Court in the case of Raza Textile Ltd. v. Income Tax Officer, Rampur, 1973 (1) SCC 633 and which has further been reiterated in the case of Shrisht Dhawan (Smt.) v. M/s Shaw Brothers, 1992 (1) SCC 534. 5. Learned Counsel for the Respondents submits that the present writ petition at this....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and the legal provisions also and then the show cause notice has been issued. 7. The Hon'ble Supreme Court in the case of Assistant Collector of Central Excise, Chandan Nagar, West Bengal Vs. Dunlop India Ltd. & Others, AIR 1985 SC 330, has observed as follows: "Article 226 is not meant to short circuit or circumvent statutory procedures. It is only where statutory remedies are entirely ill- suited to meet the demands of extraordinary situations, as for instance where the very vires of thee statute is in question or where private or public wrongs are so inextricably mixed up and the prevention of public injury and the vindication of public justice require it that recourse may be had to Article 226 of the Constitution.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Court declined to interfere at the stage of show-cause notice, perhaps this Court would not have been inclined to entertain the special leave petition; when the High Court did exercise its jurisdiction, entertained the writ petition and decided the issue on merits, we do not think it appropriate to upset the impugned order of the High Court under Article 136 of the Constitution on a technical ground." 9. Ordinarily High Court should not embark to decide the factual disputes but relegate the party to submit the reply before the authority concerned who is obliged to decide the same. In Union of India v. Vicco Laboratories, 2007 (13) SCC 270, the Hon'ble Supreme Court has held that: "31. Normally, the writ court should n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hority after considering the various documents which the Petitioner might be having in their possession like - nature of dispute that was before the International Court of Arbitration and the nature of award that they have received. Whether this would be taxable or not would have to be assessed and determined by the assessing authority based upon the evidence produced before it. 11. It would be inappropriate for this Court to interfere with the show cause notice in exercise of powers under Article 226 of the Constitution of India at this juncture as there is an alternative remedy available to the Petitioner. Further, what is also apparent is the fact that it is not a case where the Petitioner had promptly at the threshold approached the ....