South Bihar Power Distribution Company LTD. vs. Directorate General Of G S T Intelligence And Ors

Held

The Court acknowledged the petitioner's intention to question the validity of Section 66E of the Service Tax Act. The revenue did not object to the petitioner's right to challenge the validity of a provision. However, the revenue also contended that the specific issue of loan repayment, as raised by the petitioner, was not relevant to the present case. Given that the petitioner had not pursued the matter on its merits and had an alternative remedy available (approaching the Tribunal), the Court decided to dispose of the writ petition. The Court left it to the parties to contest their respective stands before the appropriate forum. No specific finding was made on the validity of Section 66E or the loan repayment issue.

Facts

The petitioner, South Bihar Power Distribution Company Ltd., filed a writ petition before the Patna High Court. The petitioner had approached the Commissioner, Goods and Services Tax, but their attempt failed as a rejection order was passed. The petitioner intended to challenge this rejection order before the Tribunal. The petitioner's counsel indicated an intention to question the validity of Section 66E of the Service Tax Act, citing reasons assigned by the Commissioner for the rejection. The respondents, Directorate General of GST Intelligence and its officials, did not object to the petitioner's right to question the validity of a provision. However, the respondents' counsel submitted that the issue of loan repayment, as argued by the petitioner, did not arise in the present case. The Court noted that the petitioner had not chosen to argue the matter on merits due to the availability of an alternative remedy.

Key Issues

1. Whether the petitioner has the right to question the validity of Section 66E of the Service Tax Act, and if so, on what grounds? (Question of law) Petitioner's Contention: The petitioner intended to question the validity of Section 66E of the Service Tax Act, bearing in mind the reasons assigned by the Commissioner for the rejection order. Revenue's Contention: The revenue had no objection to the petitioner's right to question an act on its validity, as such a right is inherent in every citizen. However, the revenue contended that the issue relating to loan repayment, as canvassed by the petitioner, did not arise in the case in question.