Taxpayers Can't Seek Writ Remedy By Bypassing Statutory Requirements Of Pre-Deposit: Bombay High Court

The Bombay High Court held that circumstances in which the appeals require some percentage of the demanded tax to be pre-deposited, do not render the appellate remedies any less efficacious.The High Court held so while considering an issue as to whether the demands are covered under the exemption notification or the notification providing for nil rate of taxes. The Division Bench of Justice M S Sonak and Justice Jitendra Jain observed that the practice of instituting petitions bypassing the statutory remedies only to avoid a pre-deposit cannot be encouraged. Facts of the case: The Petitioner/ Assessee approached the High Court challenging the show cause notices demanding goods & services tax, to the extent they pertain to service tax demands on activities in relation to functions entrusted to the MCGM under Article 243W of the Constitution. Observations of the High Court: The Bench accepted that the petitioners have remedies of statutory appeals against any orders made after the adjudication of the show cause notices, and no case is made out that the adjudicating authorities are precluded or disabled from considering the contentions now raised in these petitions. The main contention is that taxes have been demanded for services in relation to functions entrusted to the MCGM under Article 243W of the Constitution, even though the exemption notifications exempt or precisely impose only a nil tax rate on such services, added the Bench. The Bench emphasized that if the determination of the adjudicating authorities aggrieves any parties, the statute provides for statutory remedies of appeals. The factual element regarding each of the demands will have to be examined and evaluated against the backdrop of the exemption or the nil tax rate notifications relied upon by the petitioners, added the Bench. The Bench therefore observed that the exercise of determining which demands are covered and which are not also cannot be conveniently undertaken by this Court in the first instance. Thus, emphasizing that no case was made by any of the petitioners to bypass the statutory alternate remedies and insist upon the entertainment of petitions, the High Court dismissed the Assessee's petition. Counsel for Petitioner/ Assessee: Senior Advocate V Sridharan along with Advocates Prakash Shah, Jas Sanghavi, Mohit Raval and Shamik Gupte Counsel for Respondent/ Revenue: Advocates Anuja Tirmali, Komal Punjabi, Karan Adik, Karan Adik, Harshad Shingnapurkar, Maya Majumdar, Jaymala Ostwal, Subir Kumar, Abhinav Palsikar, Ashita Aggarwal, P H Kantharia, Jyoti ChavanCase Title: Oberoi Constructions vs. Union of India (Writ Petition (L) No. 33260 of 2023)Citation: 2024 LiveLaw (Bom) 599Click here to read/ download the Judgment

Taxpayers Can't Seek Writ Remedy By Bypassing Statutory Requirements Of Pre-Deposit: Bombay High Court

Pankaj Bajpai

Tags