M/S. Trichy Rasi Travels vs. The Commissioner Of GST And Central Excise

Held

The Court held that it would not entertain the writ petition on the ground of the existence of an alternate statutory remedy. The Court cited several Supreme Court judgments, including Assistant Collector of Central Excise vs. Dunlop India Ltd., Thansingh Nathmal v. Supdt. of Taxes, and another unnamed case, which emphasized that the High Court ordinarily should not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person. This rule applies with greater rigor in matters involving recovery of public dues. The Court noted that legislations for recovery of dues often contain comprehensive procedures and quasi-judicial bodies for redressal, and High Courts must insist that individuals exhaust these remedies before approaching under Article 226. The Court found that the petitioner had an available appellate remedy and that the writ petition was not intended as an alternative to the statutory procedure. Therefore, the writ petition was dismissed, and the petitioner was granted liberty to file an appeal within three weeks from the date of receipt of the order.

Facts

The petitioner, M/s. Trichy Rasi Travels, filed a writ petition challenging an Order-in-Original dated January 7, 2022, issued by the Commissioner of GST & Central Excise. The impugned order, passed under Section 73 of the Finance Act, 1994, proposed to levy service tax on a differential value of Rs. 16,02,64,581/- between the petitioner's Income Tax Returns and ST-3 returns for the periods April 1, 2015, to March 31, 2016; April 1, 2016, to March 31, 2017; and April 1, 2017, to June 30, 2017. The total service tax short paid was calculated at Rs. 2,37,26,670/-. The petitioner was issued a show cause notice on April 23, 2021, and despite multiple opportunities for personal hearing and submission of documents, failed to provide the requested information. The petitioner contended that they started operations in 2015-16, obtained an IATA license in 2016-17, and their business was primarily through other IATA agents, earning commissions below the threshold limit. They also mentioned dealing in agricultural products.

Key Issues

1. Whether the High Court should entertain a writ petition under Article 226 of the Constitution of India when an effective alternative statutory remedy is available to the petitioner? Petitioner's Arguments: The petitioner contended that the impugned order was arbitrary, illegal, and a violation of Sections 65B(44) and 66D(e) of the Finance Act, 1994. They argued that their business activities were limited to earning commissions through other IATA agents, and the turnover shown in Income Tax Returns represented amounts collected for tickets and payments made to main agents. They also claimed to deal in agricultural products. They asserted that their commission earnings were below the threshold for service tax liability and that Nil Returns were filed accordingly. They sought to quash the order-in-original. Respondent's Arguments: The respondent (Revenue) argued that the petitioner failed to furnish crucial documents despite several opportunities, including ledger accounts for ticket purchases and commissions, IATA agent statements, and break-up details of ticket sales. The respondent contended that in the absence of such documentation, the entire income received was presumed to be taxable. The respondent relied on the principle that High Courts should not entertain writ petitions when efficacious alternative remedies are available, citing several Supreme Court judgments.