M/S Mangal Murti Constructions vs. The Union Of INDIA
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The petitioner, M/s Mangal Murti Constructions, filed a writ petition before the Patna High Court challenging an order dated 26.12.2023 passed by the Principal Commissioner Central GST & Central Excise, Patna-I (Respondent No. 2) under Section 73(1) of the Finance Act, 1994 and Section 174 of the CGST Act, 2017. The petitioner also sought to quash a show cause notice dated 22.04.2019 issued by the Assistant Commissioner (Adjn) Central GST & Central Excise (Respondent No. 3), arguing it was vague and violated natural justice. Additionally, the petitioner prayed for a direction to the Appellate Tribunal to admit their appeal without insisting on pre-deposit or to grant time for it. The Court noted that the petitioner had not exhausted the statutory remedy of appeal before the Appellate Tribunal against the impugned order.
Held
The Court held that the writ petition was not maintainable as the petitioner had not exhausted the statutory remedy of appeal before the Appellate Tribunal. While acknowledging that a writ petition could be entertained in certain circumstances as per the Supreme Court's decision in Godrej Sara Lee Ltd. v. Excise and Taxation Officer, the Court found that the present case involved seriously disputed questions of fact, specifically regarding the petitioner's entitlement to Service Tax exemption. The Court noted the petitioner's failure to furnish requisite documents and cooperate with the departmental proceedings. Citing the Supreme Court's decision in Shalini Shyam Shetty v. Rajendra Shankar Patil, the Court held that such disputed facts cannot be adjudicated under Article 226 of the Constitution. The Court also observed that the petitioner had not filed a rejoinder to the counter affidavit. Accordingly, the writ petition was disposed of with liberty to the petitioner to invoke the remedy of appeal before the Appellate Tribunal within eight weeks, with a request to the Tribunal to condone the delay, considering the time spent in litigation, and to decide the appeal within three months.
Key Issues
1. Whether the writ petition is maintainable before the High Court, given the availability of a statutory remedy of appeal before the Appellate Tribunal under Section 86 of the Finance Act, 1994? (Question of law) 2. Whether the petitioner is entitled to exemption from Service Tax under the relevant provisions? (Question of mixed law and fact) Petitioner's arguments: The petitioner sought quashing of the impugned order and show cause notice, and alternatively, a direction to the Appellate Tribunal to hear their appeal on merits without pre-deposit or with extended time for pre-deposit. The petitioner contended that the show cause notice was vague and violated principles of natural justice. Respondents' arguments: The respondents contended that the petitioner had not exhausted the statutory remedy of appeal. They also argued that the petitioner failed to furnish requisite documents despite repeated requests, and the information provided was inadequate. The respondents asserted that the issue of exemption from Service Tax required adjudication by the Department or the Appellate Tribunal and could not be decided under Article 226 of the Constitution. They further stated that the petitioner failed to cooperate and did not avail the opportunity for oral hearing.
Sections Cited
Section 73(1), Section 174, Section 86
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORAL JUDGMENT (Per: HONOURABLE MR. JUSTICE P. B. BAJANTHRI) Date : 18-01-2025 In the instant writ petition, the petitioner has prayed for the following relief(s): “(i). For issuance of writ in nature of Certiorari for quashing of order dated 26.12.2023 passed by the Respondent No.2 in terms of the Section 73(1) of the Finance Act 1994 and Section 174 of the Central Goods and Service Tax 2017 (hereinafter referred to 2/4 as CGST Act 2017). (ii). For issuance of Writ in nature of Certiorari for quashing of nonspeaking and vague Show Cause Notice issued by Respondent No.3 dated 22.04.2019 as it is against the principle of the Natural Justice. (iii). For issuance a writ of Mandamus or any other appropriate writ, order or direction in the nature thereof, directing the Hon’ble Tribunal to admit and hear the appeal on merits, without insisting on payment of pre-deposit or alternatively grant some time to make pre-deposit amount. (iv). For grant of any other relief or reliefs to which the Petitioner is found entitled in the facts and circumstances of the instant case.”
The petitioner without exhausting statutory remedy of appeal before the Appellate Tribunal under Section 86 of the Finance Act,1994 against the impugned order dated 26.12.2023 passed by the 2nd Respondent has rushed to this Court. The present writ petition could have been entertained in the light of the principle laid down by the Hon’ble Supreme Court in the case of Godrej Sara Lee Ltd. Versus Excise and Taxation Officer-cum-Assessing Authority and Others, reported in 2023 SCC OnLine SC 95 (para-4), however, one of the issue is 3/4 that whether petitioner is entitled to exemption from Service tax under the relevant provision or not. In this regard, despite repeated requests from the respondents, the petitioner has not furnished requisite documents. Such requisite documents were stated to have been placed on record in the present writ petition and those material informations are inadequate as contended by the Respondents in their counter affidavit. Having regard to the disputed issues relating to whether petitioner is exempted for Service tax under the relevant provision or not is required to be adjudicated by the Department or Appellate Tribunal and the same cannot be adjudicated under Article 226 of the Constitution in the writ petition in the light of Hon’ble Supreme Court decision in the case of Shalini Shyam Shetty and another Versus Rajendra Shankar Patil, (2010) 8 Supreme Court Cases 329. Moreover, perusal of counter affidavit on behalf of Respondents read with documents it is evident that petitioner has failed to co-operate in deciding the matter. In fact, he was permitted to appear for oral hearing and the same has not been availed. Since Respondents have demanded certain authenticated documents relating to subject matter and the same was not made available. That apart, if petitioner is disputing contents of counter affidavit, he should have filed 4/4 rejoinder and it is not filed as on this day. Writ is not a proper remedy for seriously disputed question of facts that are matters of evidence.
Accordingly, the instant writ petition stands disposed of reserving liberty to the petitioner to invoke remedy of appeal before the Appellate Tribunal within a period of eight weeks from the date of receipt of this order. The Appellate Tribunal is hereby requested to condone the delay. In other words, time spent in the present litigation shall be taken note of for the purpose of condonation of delay in filing appeal. The Appellate Tribunal is hereby requested to decide the petitioner’s appeal to be filed within a reasonable period of three months from the date of receipt of such appeal.
With the above observations, instant writ petition stands disposed of.
P.S./- (P. B. Bajanthri, J) ( Sunil Dutta Mishra, J) AFR/NAFR NAFR CAV DATE NA Uploading Date 27.01.2025. Transmission Date NA
Reproduced from the public record of the Patna High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.