High Court
Legal Reasoning
wp7242.2025.odtIN THE HIGH COURT OF JUDICATURE AT BOMBAYBENCH AT AURANGABADWRIT PETITION NO.7242 OF 2025ANDWRIT PETITION NO.7258 OF 2025Pragati Construction,Through its Partner - Govind Gyanoba Makhane,Age : 67 years, Occ. Business,r/o. Plot No.23, Kapilananda Ring Road,Central Bank Colony,Latur..PetitionerVs.1.The Union of India,Through its Secretary,Ministry of Finance,Department of Revenue,New Delhi2.The Commissioner,Audit Commissioner (Nashik),Kendriya Rajswa Bhavan,Gadkari Chowk, Nashik – 422 0023.The Commissioner,CGST & Central Excise,GST Bhavan, Town Centre,N-5, CIDCO, Aurangabad..Respondents----Mr.Alok Sharma and Mr.R.S.Indani, Advocates for petitionersMr.D.S.Ladda along with Mr.Pratik Kothari, Advocates for respondentnos.1 to 3---- CORAM : R.G.AVACHAT AND NEERAJ P. DHOTE, JJ. DATE : JULY 25, 2025 2wp7242.2025ORDER :- Both these Writ Petitions are taken up together forhearing, since the issue involved therein is one and the same,besides the parties too.2.The challenge in both these Writ Petitions is to theorders, bearing Nos.31/Commissioner/KKS/Audit/2024-2025 and32/Commissioner/KKS/Audit/2024-2025, dated 12.09.2024, passedby the the Commissioner (Service Tax). In short, the ordersimpugned herein are of calling upon the petitioner – firm to payservice tax and rejecting the petitioner’s applications for rectificationof assessment. 3.The facts, in brief, giving rise to the present petitions areas follows:- The petitioner, in both the petitions, is a partnership firm.It is in the business of “Works - Contract Service”. The petitioner –firm claims to be a government contractor, providing services togovernment and local authorities. It is further case of the petitionerthat by virtue of the Mega Exemption Notification No.25/2012-STdated 20.06.2012, the services in the nature of construction of 3wp7242.2025dams, roads, etc., for government and local authorities, areexempted from payment of the service tax. On 12.09.2024,respondent no.2 issued the petitioner - firm two show cause noticesfor the accounting year 2015. The petitioner – firm appeared beforerespondent no.2 in response to the show-cause notices. The noticeshave been confirmed. The petitioner - firm, thereafter, movedapplications for rectification of the assessment orders. Thoseapplications have also been turned down. The petitions have,therefore, been filed.4.Heard. Learned counsel for the petitioners would submitthat the notices are barred by limitation. He adverted our attentionto Sections 73 and 74 of the Service Tax Act of the Finance Act tosubmit that the notices in question, ought to have been issued withina period of 18 months. He would further submit that it is neither acase of fraud nor suppression of the relevant material. He wouldfurther submit that by virtue of mega-exemption referred to hereinabove, the services in the nature of construction of dams, roads,etc., are exempted from payment of service tax. He would furthersubmit that had the petitioner – firm really liable to pay such tax, itwould have charged the same to the Government or local bodies, forwhich it rendered the services. He would further submit that the 4wp7242.2025petitioner – firm had produced RA bills of the works done by it.Those bills have, however, not been given due relevance byrespondent no.2. Learned counsel has relied on host of authorities tosubmit that in the similar facts and circumstance of the case, theshow-cause notices and the consequential orders have beenquashed and set aside:-(i)Gujarat High Court Judgment in thecase of M/s. Jay Mahakali Industrial ServiceVs. Union of India, decided on 09.01.2025(Special Civiil Application No.18864 of 2021and others);(ii)M/s.Godrej Sara Lee Limited Vs. TheExcise and Taxation Officer-Cum-AssessingAuthority and others, (2023)AIR(SC)781;(iii)Bombay High Court judgment(Principal Seat) in the case of Dish TV IndiaLtd. VS. Union of India and ors., (WritPetition No.14877 of 2023 decided on07.01.2025);(iv)This Court judgment in the Case ofKashedi Parshuram Highways PrivateLimited Vs. Union of India and ors., (WritPetition No.4555 of 2024 decided on17.04.2025);(v)Union of India Vs. Arviva Industries (I)Ltd., 2007(209) E.L.T. (S.C.); 5wp7242.2025(vi)CJ DARCL Logistics Ltd. Vs. Union ofIndia, 2023(73) G.S.T.L. 643 (Jhar.);(vii)Commissioner of Customs, Mumabivs. Toyo Engineering India Limited,2006(201) E.L.T. 513 (S.C.);(viii)Commissioner of C. Ex.Bhubaneshwar-I Vs. Champdany IndustriesLtd., (2009)(241) E.L.T. 481 (S.C.);(ix) Commissioner of C. Ex., ChandigarhVs. Shital International, 2010(259) E.L.T.165(S.C.);(X)Allahabad High Court judgment in thecase of M/s. Samsung India ElectronicsPrivate Limited Vs. State of U.P. and ors.,with connected matter (Writ Tax No.777 of2022 decided on 12.03.2024);(xi) Allahabad High Court judgment inthe case of M/s. Associated Switch Gearsand Projects Ltd., Through its Director,Jawahar Lal Jain Vs. State of U.P. ThroughSecretary, Institutional Finance, U.P. Govt.and ors., (Writ Tax No.276 of 2020);(xi)Gujarat High Court judgment in theCase of Nimeshbhai Gunvantbhai Patel Vs.Union of India and ors., (Special CivilApplication No.5044 of 2024);(xii)M/s. Ravray Construction and anr. Vs.Addl. Commissioner, CGST and CEVadodara 1 and anr., 2025-TIOL-889-HC-AHM-GST
Legal Reasoning
6wp7242.2025Learned counsel for the petitioner would further submitthat the jurisdiction of this Court under Article 226 of the Constitutionof India is wide. The petitioner – firm was not required to approachthe appellate authority, more so, when respondent no.2 issued twoshow-cause notices for one and the same year. He then took us tothe factual matrix of the matter, to ultimately urge for allowing theWrit Petitions.5.Learned counsel for the respondent – authorities would,on the other hand, submit that only with a view to avoid payment of5% of the amount to be paid by the petitioner – firm for approachingthe appellant authority, the petitions have been filed. He wouldfurther submit that all the grounds raised herein could very well beurged and solicited to be decided before the appellate forum.Learned counsel has relied on the judgment of the Apex Court in thecase of State of Maharashtra and ors. Vs. Greatship (India)Limited, (2022)AIR (SC) 4408, to submit that in taxation matters,the jurisdiction under Article 226 of the Constitution of India oughtnot to have been exercised, allowing to bypass the remedy ofappeal. 7wp7242.20256.Considered the submissions advanced. Perused thedocuments relied on and the authorities pressed into service.Admittedly, the petitioner – firm was served with two show-causenotices for one and the same assessment year (2015-2016). Inresponse to the show-cause notices, the petitioner – firm appearedbefore the authority concerned. It showed the cause. The petitioner– firm was represented by an expert namely, a CharteredAccountant. After the full-fledged hearing, the orders were passed.The petitioner, thereafter, moved applications for rectification of theorders. The authority concerned turned down those applications onthe ground of there being no error apparent on the face of record.We do not propose to go into the merits of the matter. The petitioner– firm could not be heard to say that there was no pre-show-causenotice consultation, in view of the fact that pursuant to the showcause notice, the petitioner firm appeared and the matter was,thereafter, decided. Admittedly, the petitioner-firm has an alternateefficacious remedy in the nature of an appeal.7.There is substance in the contention of learned counselfor the respondents that with a view to avoid payment of 5% of theamount directed to be paid pursuant to the final order, the 8wp7242.2025petitioners have approached this Court. The Apex Court, in the caseof Greatship (India) (supra), observed thus:-At the outset, it is required to be notedthat against the assessment order passed bythe Assessing Officer under the provisions ofthe MVAT Act and CST Act, the assesseestraightway preferred writ petition under Article226 of the Constitution of India. It is not indispute that the statutes provide for the rightof appeal against the assessment order passedby the Assessing Officer and against the orderpassed by the first appellate authority, anappeal/revision before the Tribunal. In that viewof the matter, the High Court ought not to haveentertained the writ petition under Article 226of the Constitution of India challenging theassessment order in view of the availability ofstatutory remedy under the Act. At this stage,the decision of this Court in the case ofSatyawati Tondon (supra) in which this Courthad an occasion to consider the entertainability of a writ petition under Article 226 of theConstitution of India by by-passing thestatutory remedies, is required to be referredto. After considering the earlier decisions of thisCourt, in paragraphs 49 to 52, it was observedand held as under:*49. The views expressed in TitaghurPaper Mills Co. Ltd. vs. State ofOrissa (1983) 2 SCC 433 wereechoed in CCE v. Dunlop India Ltd.(1985) 1 SCC 260 in the followingwords: (SCC p. 264, para 3)"3.... Article 226 is not meant toshort-circuit or circumvent statutoryprocedures. It is only where statutoryremedies are entirely ill-suited tomeet the demands of extraordinary 9wp7242.2025situations, as for instance where thevery vires of the statute is inquestion or where private or publicwrongs are so inextricably mixed upand the prevention of public injuryand the vindication of public justicerequire it that recourse may be hadto Article 226 of the Constitution. Butthen the Court must have good andsufficient reason to bypass thealternative remedy provided bystatute. Surely matters involving therevenue where statutory remediesare available are not such matters.We can also take judicial notice ofthe fact that the vast majority of thepetitions under Article 226 of theConstitution are filed solely for thepurpose of obtaining interim ordersand thereafter prolong theproceedings by one device or theother. The practice certainly needs tobe strongly discouraged."50. In Punjab National Bank v. O.C.Krishnan (2001) 6 SCC 569 this Courtconsidered the question whether apetition under Article 227 of theConstitution was maintainableagainst an order passed by theTribunal under Section 19 of the DRTAct and observed: (SCC p. 570, paras5-6)5. In our opinion, the order which waspassed by the Tribunal directing saleof mortgaged property wasappealable under Section 20 of theRecovery of Debts Due to Banks andFinancial Institutions Act, 1993 (forshort ‘the Act’). The High Court oughtnot to have exercised its jurisdictionunder Article 227 in view of the 10wp7242.2025provision for alternative remedycontained in the Act. We do notpropose to go into the correctness ofthe decision of the High Court andwhether the order passed by theTribunal was correct or not has to bedecided before an appropriate forum.6. The Act has been enacted with aview to provide a special procedurefor recovery of debts due to thebanks and the financial institutions.There is a hierarchy of appealprovided in the Act, namely, filing ofan appeal under Section 20 and thisfast-track procedure cannot beallowed to be derailed either bytaking recourse to proceedings underArticles 226 and 227 of theConstitution or by filing a civil suit,which is expressly barred. Eventhough a provision under an Actcannot expressly oust the jurisdictionof the Court under Articles 226 and227 of the Constitution, nevertheless,when there is an alternative remedyavailable, judicial prudence demandsthat the Court refrains fromexercising its jurisdiction under thesaid constitutional provisions. Thiswas a case where the High Courtshould not have entertained thepetition under Article 227 of theConstitution and should have directedthe respondent to take recourse tothe appeal mechanism provided bythe Act.”8.Close reading of the authorities relied on by learnedcounsel for the petitioner, it would be crystal clear that in all the 11wp7242.2025authorities, except one, the matter had reached the Apex Court afterthe assessee had exhausted the remedy of appeal under therespective statute. In none of the authorities relied on by learnedcounsel for the petitioner, the issue of availing alternate efficaciousremedy was raised. The judgments relied on, therefore, are of noassistance for the petitioner – firm. True, in the case of NimeshbhaiGunvantbhai Patel (Supra), the matter was entertained by theGujarat High Court, under Article 226 of the Constitution of India.The challenge therein was to the show-cause notice. So is not thecase herein. At the cost of repetition, it has to be stated that inresponse to the show-cause notice, the petitioner – firm appearedand contested the matter on merits.9.For all the aforesaid reasons, we are not inclined toentertain the petitions. The petitioner - firm may avail remedy ofappeal or otherwise, before the appropriate authority. Only with aview to avoid multiplicity of litigation, we hope that the appellateauthority concerned would entertain the appeal without raising anyobjection as to limitation. The Writ Petitions, thus, stand disposed of.[NEERAJ P. DHOTE, J.][R.G. AVACHAT, J.]KBP