Sanjoo Prints Private Limited vs. Union Of INDIA

Facts

The petitioner, Sanjoo Prints Private Limited, engaged in dyeing and printing of textile articles, filed a writ-application challenging an order-in-original dated September 28, 2021, along with show-cause notices dated September 29, 2020, and December 30, 2020, pertaining to Financial Years 2014-15 and 2015-16. The petitioner contended that their services were exempt from Service Tax and Excise Duty. The impugned order confirmed a demand for Service Tax, interest, and penalties totaling Rs. 1,14,38,757/- for FY 2014-15 and Rs. 1,88,20,636/- for FY 2015-16. The petitioner sought to quash these notices and the order, or alternatively, to allow waiver of pre-deposit for filing an appeal.

Held

The High Court declined to entertain the writ-application on the short ground that an alternative statutory remedy of appeal is available to the petitioner under Section 73 of the GST Act read with Section 84 of the Finance Act, 1994. The Court noted that while the pre-deposit requirement of 7.5% of the total demand might be difficult for the petitioner, this alone was not sufficient reason to bypass the statutory appeal process. The Court granted liberty to the petitioner to prefer an appropriate statutory appeal and to raise all legal contentions before the appellate authority. It also directed that any application for waiver of pre-deposit should be considered expeditiously in accordance with law. The Court did not decide on the merits of the petitioner's claims regarding exemptions or the validity of the notices and the order.

Key Issues

1. Whether the High Court should entertain a writ-application challenging an order-in-original when an alternative statutory remedy of appeal is available under Section 73 of the GST Act read with Section 84 of the Finance Act, 1994? Petitioner's Arguments: The petitioner argued that the show-cause notices and the order-in-original were issued arbitrarily and without application of mind. They also sought a waiver of pre-deposit for filing an appeal, highlighting the financial difficulty this would pose. Revenue's Arguments: The judgment does not explicitly record arguments made by the revenue. However, the Court's decision implies that the revenue would have contended that the statutory appeal mechanism is the appropriate forum for adjudication.