M/S Brahmaputra Television Network vs. Union Of INDIA And 6 Ors
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The petitioner, M/s Brahmaputra Television Network, challenged a show-cause notice dated 22.10.2021 and an Order-In-Original dated 18.06.2024. The show-cause notice demanded service tax and cess amounting to Rs. 30,19,653/- for the period 2016-17, along with interest and penalty, under the proviso to Section 73(1) of the Finance Act, 1994, read with Section 174(2) of the CGST Act, 2017. The petitioner received the notice but did not file a reply. Despite being given opportunities for a personal hearing, the petitioner did not appear, citing unspecified treatment, but without documentary evidence. The Order-In-Original confirmed the demand of Rs. 30,19,653/-, plus interest and penalty. The order was received by the petitioner on 26.06.2024.
Held
The Court held that it should not ordinarily entertain a writ petition under Article 226 of the Constitution when an effective alternative remedy is available, a principle that applies with greater rigor in tax recovery matters. Citing the Supreme Court in PHR Invent Educational Society, the Court noted that legislative enactments for recovery of public dues are comprehensive and include quasi-judicial bodies for grievance redressal. The Court also referred to M/s Godrej Sara Lee Ltd., outlining exceptions to the rule of alternative remedy, such as enforcement of fundamental rights, violation of natural justice, lack of jurisdiction, or challenge to vires of an Act. The Court found that the petitioner's failure to file a reply to the show-cause notice or attend hearings meant the principles of natural justice were not violated. The petitioner's argument about not being able to produce documents at the appellate stage was not persuasive, as they had prior opportunities. Therefore, the Court was not inclined to entertain the writ petition. The dismissal was without prejudice to the petitioner filing an appeal and raising all permissible objections.
Key Issues
1. Whether the High Court should entertain a writ petition under Article 226 of the Constitution when an efficacious alternative remedy of appeal is available to the petitioner, particularly in matters involving recovery of taxes and public dues? 2. Whether the petitioner's failure to file a reply to the show-cause notice or appear for personal hearings constitutes a violation of the principles of natural justice, thereby justifying the exercise of writ jurisdiction? Petitioner's arguments: The petitioner argued that if no relief was granted by the High Court, they would be unable to produce documentary evidence at the appellate stage. Revenue's arguments: The respondents (Union of India and others) implicitly argued, through the Court's reasoning, that an alternative remedy exists and that the petitioner failed to avail opportunities to present their case, thus not meeting the criteria for writ jurisdiction. The Court relied on Supreme Court judgments emphasizing the rule of exhaustion of alternative remedies.
Sections Cited
Section 73(1), Section 174(2)
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Cause title — parties, addresses and appearances
JUDGEMENT AND ORDER (ORAL) 21.08.2024 Heard Mr. RB Phookan, the learned counsel appearing on behalf of the petitioner. Ms. K Phukan, the learned CGC appears on behalf of the Union of India. None appears on behalf of the GST on call.
The instant writ petition has been filed by the petitioner challenging the show-cause notice dated 22.10.2021 as well as the Order-In-Original dated 18.06.2024. It is relevant to take note of that the petitioner was issued a demand cum show cause notice dated 22.10.2021, asking the petitioner to show cause as to why service tax including cess amounting to Rs.30,19,653/- for the period 2016-17 should not be demanded and recovered from him under the proviso to Section 73(1) of the Finance Act, 1994 read with Section 174(2) of the CGST Act, 2017 along with applicable interest and penalty. There is no denial to the fact that the show cause notice was received. However, the petitioner chose not to file any show cause reply. It is further seen that on various occasions, the petitioner was asked to appear by issuance of notice as is apparent from Annexure-2 and Annexure-3 to the writ petition, thereby fixing a specific time for giving an opportunity of hearing to the petitioner. However, it is seen that the petitioner did not avail the opportunity on account of certain treatment of the petitioner. However, there is no documentary evidence in support thereof.
It is further seen that on 18.06.2024, the Order-In-Original which has been Page No.# 4/7 impugned in the instant proceedings has been passed, thereby confirming to the demand of service tax including cess amounting to Rs.30,19,653/- and which is reproduced herein under:- “23. It could thus be seen that, this Court has clearly held that the High Court will ordinarily not entertain a petition under Article 226 of the Constitution if an effective remedy is available to the aggrieved person. It has been held that this rule applies with greater rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. The Court clearly
Page No.# 5/7 observed that, while dealing with the petitions involving challenge to the action taken for recovery of the public dues, etc. the High Court must keep in mind that the legislations enacted by Parliament and State Legislatures for recovery of such dues are a code unto themselves inasmuch as they not only contain comprehensive procedure for recovery of the dues but also envisage constitution of quasi-judicial bodies for redressal of the grievance of any aggrieved person. It has been held that, though the powers of the High Court under Article 226 of the Constitution are of widest amplitude, still the courts cannot be oblivious of the rules of self-imposed restraint evolved by this Court. The Court further held that though the rule of exhaustion of alternative remedy is a rule of is a rule of discretion and not one of compulsion, still it is difficult to fathom any reason why the High court should entertain a petition filed under Article 226 of the Constitution.”
From a perusal of the above quoted paragraph, it would be seen that the High Court should not ordinarily entertain a writ petition under Article 226 of the Constitution, if an effective remedy is available to the aggrieved person. The Supreme Court further emphasized that this Rule should be applied with great rigour in matters involving recovery of taxes, cess, fees, other types of public money and the dues of banks and other financial institutions. It was further observed that though the powers under Article 226 of the Constitution are of widest amplitude, still the courts cannot be oblivious of the rules of self-imposed restraint evolved.
This Court further finds it very relevant to take note of another judgment of the Supreme Court in the case of M/S Godrej Sara Lee Ltd. Vs. Excise and Taxation Officer cum Assessing Authority and Ors, reported in (2023) 109 GSTR 402. This judgment is being duly referred to by this Court taking
Page No.# 6/7 into account as to under what circumstances, the Writ Court can exercise its juri iction inspite of availability of alternative remedy. In the said judgment, the Supreme Court observed that in cases where: (i) the writ petition seeks enforcement of any of any fundamental rights; (ii) where there is a violation of the principles of natural justice; (iii) where the order or the proceedings is wholly without juri iction; (iv) where the vires of an Act is challenged; or (v) where pure questions of law is raised. In such circumstances, this Court can exercise its writ juri iction, inspite of the availability of the alternative remedy.
In the backdrop of the above, let this Court take note of the case made out by the petitioner. From the facts narrated above, it would be seen that the petitioner received the show cause notice dated 22.10.2021, but the petitioner did not take that opportunity of submitting a reply. It is further seen that the petitioner was duly given the opportunity of personal hearing, however, the petitioner did not avail such opportunity. Under such circumstances, the question of violation of the principles of natural justice do not arise. In addition to that, the other parameters where the writ petition can be entertained is not met in the instant proceedings.
The learned counsel appearing on behalf of the petitioner submitted by drawing reference to the impugned order dated 18.06.2024 that if no relief is granted by this Court, the petitioner would not be able to produce the documentary evidence even at the appellate stage. This argument so made does not inspire this Court to exercise the writ juri iction for two reasons. First, the petitioner had the opportunity of filing the show cause reply and submit the necessary documents which the petitioner for reasons best known did not do.
Page No.# 7/7 Secondly, the petitioner would always be at liberty to place the documents in support of the Appeal.
Under such circumstances, this Court is not inclined to entertain the writ petition for the reasons disclosed above. It is, however, made clear that the dismissal of the instant writ petition shall not prejudice the petitioner, if any appeal is filed. In addition to the above, the petitioner would be at liberty to raise all such objections to the impugned order dated 18.06.2024 as permissible under the law.
JUDGE Comparing Assistant
Reproduced from the public record of the Gauhati High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.