IN THE HIGH COURT AT CALCUTTA Constitutional Writ Jurisdiction Original Side Present : The Hon’ble Justice Girish Chandra Gupta And The Hon’ble Justice Arindam Sinha 25th March, 2015 GA499of 2015 APOT53of 2015 WP1099of 2013 Commissioner of Service Tax, Kolkata versus ABG Kolkata Container Terminal Private Limited & ORS.Mr.S.B.Saraf, Advocate with Mr.K.K.Maity, Advocate for the appellant Mr.J.P.Khaitan, Senior Advocate with Mr.Ananda Sen, Advocate Mr.Anuran Samanta, Advocate Mr.Biswajit Mal, Advocate for the respondents The Court :- The subject matter of challenge in this appeal is a judgment and order dated lst September, 2014 passed by the Writ Court setting aside order dated 24th September, 2013 and staying the order dated 11th November, 2013.
By the order dated 24th September, 2013 the learned Tribunal held as follows “4.
After following the due process, the adjudicating authority assessed the liability to service tax for having provided the taxable service during the relevant period, declined to accept claim of the petitioner for the benefit of the provisions of Section 73(3) of the Act (i.e.non-pursuit of further proceedings, on deposit of the liability before issuance of show cause notice).on the ground that in view of the provisions of Section 74(4) of the Act, the adjudication order, the adjudicating authority has clearly recorded that the petitioner was fully aware of its liability towards discharge of tax, that it had collected the entire tax from the client M/S.Kolkata Port Trust and had retained the amount with itself without, remitting it to the Government; that only after detection of the evasion some payments were made; that the statutory ST-3 Returns were never filed; and that all these circumstances cumulatively legitimate the inference of wilful suppression and contravention of the Act with a view to evade remittance of tax.”
5. Prima facie we find no infirmity whatsoever with the adjudication order, warranting grant of waiver of pre-deposit.
On this premise, we reject the application for waiver and direct the petitioner/appellant to remit the entire adjudicated liability to the credit of Revenue within four weeks from today.
In default, the appeal stands rejected for failure of pre-deposit, under the provisions of Section 35F of Central Excise Act, 1944 as applicable to the provisions of Finance act, 1994, qua the provisions of Section 83 of the Act.” It is the aforesaid order which was challenged in the writ jurisdiction.
During the pendency of the writ petition the appeal itself was dismissed because the order dated 24th September, 2013 was not carried out.
The aforesaid subsequent event was brought to the notice of the learned Writ Court and that was the reason why the learned Trial Court while setting aside the order dated 24th September, 2013 has stayed the order dated 11th November, 2013.
Mr.Saraf, learned Advocate appearing in support of the appeal submitted that the writ petition itself is not maintainable.
He submitted further with some justification that the learned Trial Court in setting aside the order dated 24th September, 2013 was of the opinion that the impugned order did not justify itself by reasons recorded therein.
He submitted that order was merely on the question of waiver of the pre-deposit.
Therefore a full fledged enquiry or disclosure of reasons was not considered necessary.
He added that the learned Trial Court granted an opportunity to the writ petitioner to file a fresh application seeking dispensation of pre-deposit which cannot be supported according to him.
Mr.Khaitan, learned Senior Advocate appearing for the writ petitioners/respondents advanced the following submissions :a) By the show cause notice dated 8th September, 2009 the Commissioner wanted the writ petitioner to show cause why penalty should not be levied under Sections 76, 77 and 78.
He contended that penalty obviously cannot be levied under all the sections viz., 76, 77 and 78.
Therefore, the intention was that the writ petitioner should show cause why he should not be penalised under Section 76 or section 77 or Section 78.
The penalty contemplated under Section 76 is minor compared to the penalty contemplated under Section 78.
As a matter of fact the penalty contemplated under Section 78 is the highest penalty.
The Commissioner proceeded to impose the highest penalty without disclosing special reasons for that.
This was a clear case of improper exercise of jurisdiction.
The Commissioner has not disclosed as to why section 78 was preferred to .
Section 76 which was one of the sections under which the department proposed to penalise the writ petitioner.
The exercise was clearly in excess of jurisdiction.
It is the aforesaid illegal order of Commissioner which is under challenge before the Tribunal.
He contended that without considering the merits of the Appeal even prima facie and without considering the question of hardship the Tribunal refused to waive the pre-deposit.
Therefore the order refusing to waive the pre-deposit was passed without application of mind and the Writ Court was justified in setting aside the order.
Mr.Khaitan did not however assail the contention that there was no reason why writ petitioner should have been given an opportunity to apply for dispensation of the penalty once again.
We have considered the rival submissions advanced by the learned counsel appearing for the parties.
We find substance in the submission of Mr.Saraf that there was no justifiable reason to grant an opportunity to the writ petitioner to apply for afresh for dispensation of pre-dispensation.
We are also prima facie impressed by the submissions of Mr.Khaitan and as such are unable to interfere with the order of the learned Trial Court in so far as the same is directed against the order dated 24th September, 2013.
In the result the appeal is partly allowed.
The Tribunal is directed to re-hear the application for dispensation of pre-deposit in accordance law within a a period of two months from the date of communication of this order.
Needless to mention that the order dated 11th November, 2013 can no longer survive and is therefore set aside.
We are told that on the basis of the order passed by the learned Trial Court a fresh application for setting aside of the dispensation of pre-deposit has been filed.
That application is permanently stayed.
The earlier application for the same purpose shall be taken up for hearing.
The contention of Mr.Saraf as regards maintainability of a writ petition may be considered in appropriate case.
In this case exercise of power under Article 226 was well justified.
Needless to mention that the views expressed herein, if any, are for the purpose of disposal of this appeal and shall not prevent the Tribunal from arriving at its own conclusion in accordance with law.
(Girish Chandra Gupta, J.) (Arindam Sinha, J.) ANC