Deepak Chawla vs. Union Of INDIA

Held

The Court held that the writ petition was not maintainable. The primary reason was that the petitioner had already responded to the show cause notice by filing a reply, and no coercive action had been taken against them. The pendency of the reply before the respondent authority meant that the matter was still at the stage of adjudication. The Court also noted that challenging the notification while the matter was sub judice before the Supreme Court, in a writ petition against a show cause notice, did not make the petition tenable. The Court stated that any assessment order passed would be subject to appeal. The petitioner's prayer to keep their remedy reserved against the decision on their reply was implicitly acknowledged, as any adverse order would be appealable.

Facts

The petitioner filed a writ petition seeking to quash a demand-cum-show cause notice dated December 11, 2020, issued by the Assistant Commissioner (Anti-Evasion-I), Dehradun. The petitioner argued that the provisions under which the notice was issued were sub judice before the Supreme Court. The petitioner had already filed a reply to the show cause notice on January 12, 2021, which was pending consideration. The petitioner contended that no coercive action for recovery of service tax on royalty should be taken until the validity of the provisions and the reply were decided. The petitioner also challenged the notification prescribing the criterion for levying service tax on royalty paid by mining lease holders.

Key Issues

1. Whether a writ petition challenging a show cause notice is maintainable when the petitioner has already filed a reply and the matter is pending before the respondent authority, and simultaneously challenging the validity of the provisions under which the notice was issued, which are sub judice before the Supreme Court? Petitioner's arguments: The petitioner contended that the show cause notice should not have been issued as the validity of the underlying provisions was under consideration by the Supreme Court. They argued that no positive action of recovery could be taken until their reply was decided. They also sought to challenge the notification regarding service tax on royalty as an alternative prayer. Revenue's arguments: The judgment does not record specific arguments from the revenue. However, it notes that the petitioner had already approached the respondents and submitted a reply, which was pending. The court also observed that the challenge to the notification was intended to override the issue of the writ petition against the show cause notice.