Atharva Associates vs Union of India

Dr. Jawad Rahim, J.�The petitioner, a service provider, provides services to various industrial units in the nature of raw water supply, bitumen drum filling and maintenance, repair of water pump house, etc. During the course of business, under the bona fide belief that the activity did not attract service tax, it did not collect or remit tax for the services rendered. Sri Y. Hariprasad appears for Respondent No. 1. Mr. Jeevan Neeralgi, Addl. CGSC, appears for respondents 2 to 5. Respondent Nos. 6 and 7 though served have remained unrepresented.

Heard. Perused records which reveal:

(a) On 16-10-2012 the Additional Commissioner of Central Excise, Mangalore, issued a show-cause notice in C. No. IV/09/210/2012 S.T. Hars. Adjn. II calling upon the petitioner to show-cause why its business activity as service provider should not be made liable for tax. Thereafter the said authority passed an Order in No. 49/2013 S.T. ADC on 22-3-2013 confirming the proposed action vide show-cause notice dated 16-10-2012.

(b) Petitioner being aggrieved by such action, has preferred an appeal on 22-6-2013 before the Commissioner of Central Excise (Appeals), Mysore, on 22-6-2013 and the same is pending. Meanwhile they also moved an application for interim stay which is pending consideration without result.

(c) When things stood thus, Respondent No. 4 issued two recovery notices dated 7-1-2014 [No. IV/16/69/2013 S.T.(TRC)] and 13-1-2014 [No. IV/16/69/2013 S.T.(TRC)/458] to enforce the order dated 22-3-2013 passed by the Assistant Commissioner of Central Excise determining tax liability for recovery, produced in this petition and marked as Annexures-D and E respectively.

(d) Petitioner addressed letters on 13-1-2014 and 18-1-2014 to the Commissioner of Central Excise (Appeals), Mysore, (Respondent No. 5) requesting him to grant stay against the order dated 22-3-2013 impugned in the appeal. Its grievance is, the appellate authority has failed not only to consider the appeal, but the said application has put the petitioner in a very vulnerable position and under threat of punitive action.

Sri Jeevan Neeralgi who has taken notice for the authorities, i.e. respondents 2 to 5 would submit, no doubt petitioner''s apprehension may be right about coercive action for recovery of the amount determined as tax, yet in view of the alternate remedy of appeal, the petitioner must seek relief therein and not by this writ action.

Similar contention is urged by respondents 6 and 7 to oppose the relief sought.

From the submission of both sides, it is not in dispute the respondent has initiated recovery proceedings to recover the amount determined as tax by order dated 22-3-2013. It is also not in dispute that the petitioner availed the statutory remedy of appeal which is pending adjudication and that its application seeking stay of the impugned order has not yet been considered, consequent to which the impugned order is executable. In the given fact situation, when the statutory remedy of appeal is availed by the petitioner, it will be entitled to protection till adjudication of the grounds of appeal against the impugned order. If the impugned order as passed by the 4th respondent is allowed to be executed, it is obvious the appeal will become infructuous or will lead to multiplicity of proceedings.

In the circumstances, I am satisfied the petitioner has made out a case for grant of relief which, undoubtedly, will be for the limited purpose of ensuring petitioner to exercise the right of appeal. Being of this opinion, rule issued is made absolute. All further proceedings pursuant to the impugned order dated 22-3-2013 vide Annexure-B and all proceedings pursuant thereto initiated by the 4th respondent to enforce that order vide Annexures-D and E be, and the same are hereby stayed till consideration of the stay application in Appeal No. 184/13/MR/S.T. pending on the file of Commissioner (Appeals), Mysore. The appellate authority is directed to dispose of the application within an outer limit of three weeks from the date of receipt of a copy of this order.