Morgan Construction Co. INDIA PVT LTD (Now Merged With Siemens LTD) vs. The Union Of INDIA And Anr

Facts

The Petitioner, Morgan Construction Co. India Pvt. Ltd. (now merged with Siemens Ltd.), challenged an order dated 29 January 2021 passed by the Commissioner, CGST & Central Excise, Belapur Commissionerate. The impugned order confirmed a demand of Service Tax totaling Rs. 16,56,54,302/- for the period April 2007 to March 2011, and Rs. 7,60,25,680/- for the period April 2011 to March 2012. It also confirmed demands for interest and imposed penalties under Section 78 of the Finance Act, 1994, on both amounts. The Petitioner argued that the Commissioner's order was passed in judicial indiscipline by disregarding a binding decision of the Tribunal in *Go Bindas Entertainment Pvt. Ltd. vs. CST, Noida*. The Respondents initially contended that the Petitioner had an alternate remedy of appeal.

Held

The Court held that the Commissioner, in the impugned order, had made observations indicating an error in disregarding the binding decision of the Tribunal in *Go Bindas Entertainment Pvt. Ltd. vs. CST, Noida*. The Respondent No.2, through their counsel, conceded that the Commissioner's previous view was erroneous and that the *Go Bindas* decision could not be ignored. Consequently, the Court found it necessary to quash and set aside the impugned order. The matter was restored to the file of Respondent No.2 for decision in accordance with the law and the observations made by the Court, acknowledging the binding precedent. The Court did not decide on the merits of the tax demand or penalties.

Key Issues

1. Whether the Commissioner, in the impugned order, committed judicial indiscipline by failing to follow the binding decision of the Tribunal in *Go Bindas Entertainment Pvt. Ltd. vs. CST, Noida* (2019 (27) GSTL 397 (Tri))? (Question of law) Petitioner's Argument: The Petitioner contended that the Commissioner was bound by the Tribunal's decision in *Go Bindas Entertainment Pvt. Ltd.* and by disregarding it, committed judicial indiscipline, warranting interference in writ jurisdiction. Respondents' Argument: Initially, the Respondents argued that the Petitioner had an alternate remedy of appeal. Subsequently, the Respondent No.2 (Commissioner) stated that there was an error in the Commissioner's previous view and that the *Go Bindas Entertainment Pvt. Ltd.* decision would have to be kept in mind and dealt with, and could not be ignored.