Rajasthan State Road Transport Corporation vs. The Union Of INDIA

Held

The Court held that it would exercise writ jurisdiction only if the invocation of power by the statutory authority is ex facie illegal and utterly unjustified, emphasizing a circumspect approach in tax matters. Regarding the petitioner's claim of exemption for Stage Carriage Permit operations, the Court directed that this aspect must be highlighted in the reply to the show cause notice. If the petitioner argues this before the Commissioner during adjudication, the Order in Original must be reasoned and specifically address the applicability of service tax in light of the claimed exemption. All contentions and rights of the parties are reserved. The writ petitions were disposed of with these directions.

Facts

The Rajasthan State Road Transport Corporation (RSRTC), through its Dy. General Manager (Finance and Tax), filed multiple writ petitions challenging show cause notices issued by the Commissioner of Goods and Service Tax. The notices alleged non-payment or non-deposit of service tax for various periods and claimed that taxable services were not disclosed. The authorities also sought to extend the period of demand, alleging willful suppression of material facts by the petitioner. The petitioner contended that service tax was not payable as its activity of plying buses under Stage Carriage Permits was exempted during the relevant periods, relying on specific notifications.

Key Issues

1. Whether the High Court should exercise its writ jurisdiction to quash show cause notices issued by the GST authorities when the petitioner claims exemption from service tax based on specific notifications for its stage carriage operations? Petitioner's Argument: The petitioner argued that service tax is not payable on its activities as a Stage Carriage Permit holder, citing exemptions available for such services during the periods in question and relying on relevant notifications. They sought to have the show cause notices set aside on this basis. Revenue's Argument: The revenue authorities issued show cause notices alleging non-payment of service tax and willful suppression of facts, seeking to extend the demand period. The judgment does not explicitly record separate arguments from the revenue beyond the basis for issuing the notices.