Ayursundra Hospitals (Guwahati) PVT. LTD And Anr vs. Union Of INDIA And Anr

Facts

The petitioners, Ayursundra Hospitals (Guwahati) Pvt. Ltd. and its shareholder/director, filed a writ petition challenging an order-in-original dated December 13, 2022, passed by the Principal Commissioner, GST and Central Excise Commissionerate, Guwahati. The order confirmed a demand of service tax, interest, and penalties totaling Rs. 3,57,30,422/- for the financial year 2016-17. The petitioner argued that healthcare services, including diagnostic services, were exempt from service tax under various notifications. The revenue initiated proceedings based on the petitioner's income tax returns, alleging suppression of facts and non-filing of returns. The petitioner contended that the show-cause notice was vague and the impugned order was passed on different considerations not disclosed in the notice.

Held

The Court held that while the impugned order might be erroneous, it was not wholly without jurisdiction. The Court noted that the respondent had considered the points raised by the petitioners in their reply, dealt with the issue of limitation, the effect of non-disclosure of taxable value, and provided justifications for the tax liability despite exemption notifications. The Court also observed that the petitioners had not responded to prior communications from the department. Citing the Supreme Court's decisions in Whirlpool Corporation and Radha Krishan Industries, the Court concluded that the writ petition was not for enforcement of fundamental rights, nor did it involve a challenge to the vires of a statute, nor was there a violation of principles of natural justice or a lack of jurisdiction. Therefore, the writ petition was hit by the alternative and efficacious remedy available to the petitioners before the CESTAT. However, the Court noted that the CESTAT was not functional. Despite this, the Court dismissed the writ petition at the motion stage, stating that the period from filing the petition until the order date would be considered as the time spent bona fide pursuing a remedy before a wrong forum.

Key Issues

1. Whether the writ petition is maintainable in light of the availability of an alternative and efficacious remedy before the Customs, Central Excise and Service Tax Appellate Tribunal (CESTAT)? Petitioner's Arguments: The petitioners contended that the show-cause notice did not provide clear notice of the revenue's intention and that the impugned order was based on considerations not present in the notice. They argued that the issue of exemption was not properly dealt with and their claim of non-liability to service tax was not adequately addressed. They sought quashing of the order and prayed for interim relief. Revenue's Arguments: The respondents argued that all contentions raised by the petitioners were addressed in the impugned order, which extensively referred to statutory provisions. They submitted that the writ petition was not maintainable and the petitioners should be relegated to their alternative remedy before the CESTAT.