By TIOL News Service

CHENNAI, JULY 05, 2018: A writ appeal was filed by the department against the interim order of stay granted by the writ Court.

The petitioner had challenged the Order-in-Original No.14/2011 dated 27.04.2011 wherein the adjudicating authority confirmed the demand of service tax and interest and also imposed penalty.

The said order was put to challenge before the writ Court after seven years, only when the properties belonging to the writ petitioner was put into public auction for realization of the tax dues and other amounts payable by the writ petitioner.

The counsel for the Revenue vehemently argued that the very entertaining of the writ petition against the Order-in-Original cannot be sustained apart from the fact that the writ Court has also chosen to grant the interim stay of such order at the admission stage itself without even allowing the respondents to put forth their case and bring the actual state of affairs as on the date of filing the writ petition.

Inasmuch as it is submitted that the properties belonging to the writ petitioner were already under attachment as early as in the year 2011 itself and consequent upon such attachment, e-auction was conducted and third party successful bidder had also emerged on 16.03.2018 and a delivery order has been issued in the name of the successful bidder on 20.03.2018. It is, therefore, emphasised that by suppressing all these facts, the writ petition had been filed only to get an interim order, so as to prolong the proceedings one way or other. Apex court decision in State Bank of Travancore vs. Mathew K.C (2018) 3 SCC 85 is relied upon .

The respondent/writ petitioner submitted that as the company was closed as early as in the year 2008, much earlier to the order of the adjudicating authority, they were unaware of the said order or any subsequent developments and, therefore, they did not challenge the Order-in-Original immediately; that even otherwise, before bringing the property for auction, the appellants/respondents should have issued notice to the writ petitioner.

After hearing both sides and perusing the materials on record, the High Court inter alia observed –

+ It is the case of the writ petitioner that they are not aware of the order passed by the adjudicating authority.

+ The averment made at paragraph 9 of the affidavit would only indicate that such order was only not brought to the knowledge of the higher management and not that the said order was not at all within the knowledge of the writ petitioner.

+ When such being the contention of the writ petitioner, we do not find any reason or justification on the part of the writ petitioner in challenging the impugned proceedings after such inordinate delay of seven years.

+ Perusal of the affidavit filed in support of the writ petition would also reveal that the petitioner has not explained as to why they approached this Court after a period of seven years without even filing a statutory appeal within the prescribed period of limitation, except to state that the writ petitioner was constrained to close down their operations due to severe financial crunch and further labour unrest and management rejigs have contributed to valuable time having been lost much to the writ petitioner's own prejudice.

+ Needless to say that when the writ petitioner had suffered an order at the hands of the adjudicating authority as early as on 27.04.2011, unless and until such order is put to challenge before the appropriate forum immediately, the writ petitioner cannot be heard to say that due to financial crunch, the challenge was not made immediately.

+ Even otherwise, it is well settled that when an effective alternative remedy is available under the relevant statute, filing of the writ petition cannot be entertained, more particularly, in fiscal matters. [M/s. Nivaram Pharma Private Limited -  2005-TIOL-29-HC-MAD-CX, Raj Kumar Shivhare -  2010-TIOL-29-SC-FEMA, Metal Weld Electrodes -  2013-TIOL-865-HC-MAD-CESTAT relied upon.]

+ Even though the same (Interim stay) has been granted at the admission stage, a prima facie view should have been stated for granting such interim order, more particularly, when the very impugned proceedings was passed as early as on 24.07.2011 and as against such proceedings, a statutory appellate remedy was very much available to the writ petitioner before the concerned appellate authority.

After extracting paragraphs 16 and 17 of the apex court decision (State Bank of Travancore vs. Mathew K.C) cited by the counsel for the Revenue, the High Court observed that in the peculiar facts and circumstances of the case and since the delivery order had already been issued to the successful bidder, there was no justification to sustain the in terim order of stay granted by the writ Court.

Accordingly, the Writ Appeal was allowed and the interim order of stay granted by the writ Court was set aside.

(See 2018-TIOL-1251-HC-MAD-ST)