Mahesh Kumar Chanani And Anr Vs Union of India And 2 Ors. (Gauhati High Court)
The Gauhati High Court allowed a writ petition challenging a service tax demand and adjudication order issued under Section 73(1) of the Finance Act, 1994 on the ground that the proceedings were ex facie barred by limitation and therefore without jurisdiction. The petitioner, a proprietorship concern engaged in execution of works contracts, claimed exemption under the Mega Exemption Notification issued under the Finance Act, 1994. Nevertheless, a Demand-cum-Show Cause Notice dated 11.04.2022 was issued for FY 2016–17 alleging non-payment of service tax amounting to ₹26.57 lakh. Although the petitioner replied to the notice, the adjudicating authority confirmed the demand through Order-in-Original dated 24.04.2024.
Before the High Court, the petitioner argued that the notice itself was barred by limitation under Section 73(1), rendering the entire proceedings void. The petitioner contended that limitation under Section 73(1) is a jurisdictional condition and that the existence of an appellate remedy could not bar exercise of writ jurisdiction where proceedings were wholly without jurisdiction. Reliance was placed on judgments including Whirlpool Corporation, Calcutta Discount Company Ltd., Bhatinda District Cooperative Milk Producers Union Ltd., and Foramer France.
The Revenue opposed the petition on maintainability grounds, contending that the petitioner had an alternative remedy of appeal under Section 107 of the CGST Act, 2017. Reliance was placed on decisions in Power Line Air Express.
