M/S.Pudukottai Municipality vs. The Assistant Commissioner Of Central Tax

Held

The Court noted the petitioner's submission that they may be permitted to file an appeal before the appropriate authority within two weeks. The respondent did not object to this request. Consequently, the Court disposed of the writ petition by granting the petitioner liberty to file an appeal before the appropriate authority within two weeks from the date of receipt of a copy of the order. The Court directed that if an appeal is filed, it shall be entertained without reference to limitation, provided all other conditions for filing an appeal are met. Orders on the appeal are to be passed in accordance with law after affording a reasonable opportunity of hearing to the petitioner. No order as to costs was made. The issue of jurisdiction and the validity of the service tax levy were not decided on merits.

Facts

The petitioner, Pudukkottai Municipality (now City Municipal Corporation), filed a writ petition challenging an order-in-original dated June 13, 2023, passed by the Assistant Commissioner of Central Tax. The petitioner argued that the levy of service tax on rented immovable property was without jurisdiction, as they discharged their obligations under Article 243W of the Constitution. They also contended that the impugned order was not properly communicated, preventing them from filing an appeal within the stipulated time. The respondent argued that the matter involved disputed questions of fact, warranting restraint from the High Court in exercising writ jurisdiction. Approximately 70% of the demand had already been recovered.

Key Issues

1. Whether the levy of service tax on immovable property rented by the petitioner, a municipality, falls within the purview of the Finance Act, 1994, and is within the jurisdiction of the respondent, considering the petitioner's obligations under Article 243W of the Constitution of India? Petitioner's Arguments: The petitioner contended that the service provided (renting of immovable property) does not fall under the Finance Act, 1994, and the levy of service tax is without jurisdiction, violating Article 265 of the Constitution. They also argued that the impugned order was not properly served, hindering their ability to file an appeal. Respondent's Arguments: The respondent argued that the impugned order involves disputed questions of fact, and therefore, the High Court should exercise restraint and not entertain the writ petition under Article 226 of the Constitution.