Sajid Rahman vs. The Union Of INDIA And Anr

Held

The Court held that the writ petition was not maintainable due to the existence of an alternative and efficacious statutory remedy of appeal. The Court reasoned that the principle of self-restraint dictates that constitutional courts should refrain from exercising writ jurisdiction when a statutory remedy is available. The Court found that the materials available in the writ petition were insufficient to prima facie satisfy itself that the petitioner had produced proof before the respondent no. 2 that all receipts for which TDS was deducted were against contractual dues entitled for exemption. Therefore, the decisions cited by the petitioner could not be applied to the unique facts of this case. The Court dismissed the writ petition at the motion stage, directing that the period spent from March 21, 2022, to June 22, 2023, would be excluded from the computation of limitation if the petitioner chose to file a statutory appeal.

Facts

The petitioner, Sajid Rahman, doing business as M/s. Luhit Enterprise, filed a writ petition challenging a demand-cum-show-cause notice dated November 7, 2019, and an order-in-original dated December 28, 2021, passed by the Principal Commissioner, CGST & Central Excise, Guwahati. The impugned order confirmed a service tax demand of Rs. 2,95,33,148/-, along with interest and penalties under various sections of the Finance Act, 1994. The petitioner argued that his contract works for government departments were exempt from service tax under Mega Exemption notification no. 25/2012-ST. The revenue contended that an alternative and efficacious remedy of appeal was available to the petitioner, and the petitioner had suppressed material facts by not responding to earlier notices and failing to provide necessary documentation.

Key Issues

1. Whether the writ petition is maintainable under Article 226 of the Constitution of India despite the availability of an alternative and efficacious statutory remedy of appeal? (Question of law). The petitioner argued that the existence of an alternative remedy does not always preclude a High Court from exercising its writ jurisdiction, citing several Supreme Court and High Court judgments. The revenue contended that the petitioner failed to make out a case for bypassing the statutory remedy, as the demand-cum-show-cause notice provided all necessary particulars and the petitioner's reply was insufficient. The revenue relied on the Supreme Court's decision in Magadh Sugar & Energy Ltd. v. State of Bihar & Ors. 2. Whether the petitioner's contractual receipts are exempt from service tax under Mega Exemption notification no. 25/2012-ST dated June 20, 2012? (Question of mixed law and fact). The petitioner asserted that his works contracts with the Irrigation Department, Directorate of Fisheries, and NF Railway qualified for exemption. The revenue argued that the petitioner had not provided sufficient proof to substantiate this claim and had failed to disclose material facts.