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In spite of alternate remedies provided in the Act, writ petition can be entertained if imposition of duty is per se unsustainable and illegal
Facts
The Petitioner was granted contract for construction and maintenance of various roads whereunder it undertook repairs and maintenance of roads. The Department raised service tax demand contending that petitioner provided services of management, maintenance and repairs of roads falling under erstwhile section 65(64) of the Act. Aggrieved by the same, the petitioner filed writ petition on the ground that department has ignored exemption applicable to petitioner in terms of Notification No. 24/2009-ST dated 27.07.2009 and retrospective exemption granted u/s. 97(1). The Department challenged this writ petition both on merits as well as maintainability.
Held
The Hon’ble High Court held that when imposition of tax or duty is challenged and when order of assessment is impugned in a petition under Article 226, they are reluctant to interfere into the matter on account of availability of alternate remedy of appeals. However, it further held that there is an exception to this rule and the Court can interfere if the imposition of duty is per se unsustainable and illegal. As regards the merits, the High Court observed that from the facts of the case it was clear that service in question was exempt, however, revenue had raised demand by disregarding exemption notification and amended provisions of law. Hence, allowing the writ the demand was held unsustainable and illegal.
