Facts of the Case

The petitioner, T. Ramar, was engaged in works contracts for the Public Works Department. Services rendered to the Government by way of construction, commission, installation and completion were exempted under Notification No.25/2012-Service Tax, but this exemption was withdrawn by Notification No.6/2015-Service Tax dated 01.03.2015, with effect from 01.04.2015. The respondents issued a show cause notice dated 25.04.2022 demanding service tax for the period 01.10.2016 to 30.06.2017, to which the petitioner replied on 01.12.2022. Without granting a personal hearing, the first respondent, Assistant Commissioner of CGST and Central Excise, Madurai-I Division, passed the impugned assessment order dated 07.12.2022 (DIN:20221259XO000061186D) imposing service tax and penalty. Aggrieved, the petitioner filed this writ petition under Article 226 before the Madurai Bench of the Madras High Court seeking a writ of certiorari to quash the order.

Issues Involved

  1. Whether the impugned assessment order imposing service tax and penalty, passed without granting the petitioner a personal hearing, was liable to be quashed under Article 226 of the Constitution.
  2. Whether the petitioner ought to be relegated to the statutory appellate remedy under Section 107 of the Tamil Nadu Goods and Service Tax Act, 2017, in light of the amnesty scheme extending the appeal filing window to 31.01.2024.

Petitioner's Arguments

  • The services rendered to the Government under Public Works Department contracts were exempt from service tax under Notification No.25/2012, and although the exemption was withdrawn with effect from 01.04.2015, the demand raised for the period 01.10.2016 to 30.06.2017 required proper adjudication on facts and law.
  • The petitioner had submitted a reply dated 01.12.2022 to the show cause notice, disputing the demand.
  • The first respondent passed the impugned assessment order dated 07.12.2022 without affording the petitioner a personal hearing, violating principles of natural justice and rendering the order illegal and devoid of merits, warranting quashing by way of certiorari.

Respondent's Arguments

  • The petitioner had an efficacious alternative remedy of appeal under Section 107 of the Tamil Nadu Goods and Service Tax Act, 2017, ordinarily to be filed within 90 days of communication of the order.
  • Relying on the GST Council's minutes dated 07.10.2023, an amnesty scheme under Section 148 of the Act had been recommended, extending the time for filing appeals against orders passed under Sections 73 or 74 (on or before 31.03.2023) up to 31.01.2024, subject to conditions.

Court Order/Findings

  • The Court noted that the petitioner had an appellate remedy under Section 107 of the Tamil Nadu Goods and Service Tax Act, 2017, and that the GST Council had extended the time limit for filing such appeals up to 31.01.2024 through the amnesty scheme referable to Section 148.
  • Given the availability of the statutory appeal remedy and the extended limitation window under the amnesty scheme, the Court held that the writ petition need not be adjudicated on merits and disposed of the petition, relegating the petitioner to the appellate route.
  • The petitioner was granted liberty to file an appeal before the Appellate Authority within two weeks from the date of receipt of a copy of the order.
  • No order as to costs was made, and the connected miscellaneous petition was closed.

Important Clarification

  • Where a taxpayer has an appellate remedy under Section 107 of the GST enactments, courts may decline to examine the merits of a writ petition and instead relegate the taxpayer to the statutory forum, particularly where an amnesty scheme has extended the limitation for filing such appeals.
  • The GST Council's recommendation (minutes dated 07.10.2023) for a special procedure under Section 148 permitting appeals against orders passed under Sections 73 or 74 (on or before 31.03.2023) up to 31.01.2024 was treated as a relevant factor favouring relegation to the appellate authority rather than continued writ adjudication.

Sections Involved

  • Article 226 of the Constitution of India — empowers High Courts to issue writs, including certiorari, for quashing illegal administrative or quasi-judicial orders.
  • Section 107 of the Tamil Nadu Goods and Service Tax Act, 2017 — provides the statutory appellate remedy against orders passed by adjudicating authorities, ordinarily within 90 days of communication.
  • Section 148 of the Tamil Nadu Goods and Service Tax Act, 2017 — empowers the Government to notify special procedures for specified classes of taxable persons, the basis for the amnesty scheme extending appeal timelines.
  • Sections 73 and 74 of the Tamil Nadu Goods and Service Tax Act, 2017 — deal with determination of tax not paid or short paid, without and with allegation of fraud or wilful misstatement respectively, under which the underlying demand orders covered by the amnesty scheme were passed.

Decision – In Favour of

The writ petition was disposed of without any adjudication on the merits of the service tax demand or penalty. The Court neither upheld nor set aside the impugned assessment order; instead, it relegated the petitioner to the statutory appellate remedy under Section 107 of the Tamil Nadu Goods and Service Tax Act, 2017, granting liberty to file an appeal within two weeks, in view of the extended limitation available under the GST Council's amnesty scheme. The outcome cannot be characterised as a decision in favour of either the assessee or the Department on merits; it is a procedural disposal preserving the petitioner's right to pursue the appellate remedy.

Related Case Laws

No directly on-point case notes are currently published on this site.

Case Details

  • Court: Madras High Court, Madurai Bench
  • Case No.: W.P.(MD) No.24012 of 2023 (with W.M.P.(MD) No.20165 of 2023)
  • CNR: Not available
  • Coram: Justice B. Pugalendhi
  • Decision Date: 09.10.2023
  • Disposal Nature: Disposed of with liberty to file a statutory appeal, relegating the petitioner to the appellate remedy under the GST amnesty scheme

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