Writ petitions challenging show cause notices should not be entertained unless exceptional circumstances exist; petitioners must exhaust statutory remedies available under tax laws.

JUDGMENT :

Per M. S. Sonak, J.

1. Heard learned counsel for the parties.

2. Learned Counsel for the parties agree that a common judgment and order can dispose of these petitions.

3. In Writ Petition (L) No.33260/2023(OS), Writ Petition No.1762/2024(OS), Writ Petition No.3402/2024(OS), Writ Petition No.3629/2024(OS), the challenge is to the show cause notice issued by the respondent under the provisions of the Central Goods and Services Tax Act, 2017 (CGST Act), Integrated Goods and Services Tax Act, 2017 (IGST Act) and Maharashtra Goods and Services Tax Act, 2017 (MGST Act).

4. In Writ Petition No.3624/2024(OS), the challenge is also to the show cause notice, but pending this petition, the show cause notice was disposed of by order dated 30 April 2024. Therefore, leave is applied by interim application (L) No.23337/2024 to amend the petition and to challenge the order dated 30 April 2024. In Writ Petition No.3085/2024(OS), the challenge is to the order dated 29 December 2023, inter alia, on the ground that the show cause notice itself was infirm.

5. In effect, therefore, the challenges in these petitions are mainly to the show cause notices issued to the petitioners, giving them an opportunity to show cause as to why the potential demands towards goods and service tax be not enforced against them.

6. The learned Counsel for the respondents submitted that these petitions should not be entertained because the petitioners could always respond to the impugned show cause notices by raising all the pleas now raised in these petitions. They submitted that even if any adverse orders were to be made, they were statutorily appealable. They submitted that none of the circumstances even remotely justifying the deviation from the rule of exhaustion of alternate remedies were attracted in the present matters. Therefore, they urged the dismissal of these petitions and the relegation of the petitioners to avail of the alternate remedies available to them. They relied upon precedents, which we propose considering in this judgment and order.

7. Mr Sridharan learned Senior Advocate appearing for the petitioners in Writ Petition (L) No.33260/2023 (OS) (and some other matters) and the other Counsel for the petitioners in the connected petitions submitted that the impugned show cause notices were without jurisdiction and there were no disputed questions of fact involved. Therefore, they submitted that these petitions should be entertained instead of relegating the petitioners to the alternate remedies that might be available to them.

8. Mr Sridharan relied on Notification No.12/2017 - Central Tax (Rate) dated 28 June 2017 to submit that this Notification provides for nil rate of tax for services by Central Government, State Government, Union Territories, Local Authorities or Governmental Authority by way of any activity in relation to any function entrusted to the Municipality under Article 243W of the Constitution. He submitted that by the impugned show cause cum demand notices, the petitioners are mainly called upon to pay service tax on services rendered by the Municipal Corporation of Greater Mumbai (MCGM) in relation to the functions entrusted to the MCGM under Article 243W of the Constitution. Accordingly, he submitted that service tax at nil rate of duty was payable on such services, given the Notification dated 28 June 2017 and similar such Notifications covering the fee.

9. Mr Sridharan, in the context of Writ Petition (L) No.33260/2023, which he urged may be treated as the leading petition, submitted a chart, which, according to him, demonstrated that the services rendered by the MCGM pertain to functions entrusted to the MCGM under Article 243W of the Constitution. Based on the same, Mr Sridharan submitted that no service tax or service tax at a nil duty rate was payable for such services. Accordingly, he submitted that no useful purpose would be served by requiring the petitioner to go through the motions of adjudication, appeals, etc. He also po