LexM/S. SHOELINE versus COMMISSIONER OF SERVICE TAX AND ORS.
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A B [2017] 8 S.C.R. 582 MIS. SHOELINE v. COMMISSIONER OF SERVICE TAX AND ORS. (Civil Appeal No. I 0214of2017) AUGUST 10,2017 [A.K. SIKRI AND ASHOK BHUSHAN, JJ.) Equity - Legality of service tax was to be determined for period July 9, 2004 to March 31, 2006 - The validity of demand C was confirmed by the Joint Commissioner of service tax - No statutory appeal filed by the appellant against the order - Further. appellant made payments of service tax - However. appellant was _aware that there were numerous other litigations pending against service tax - Jn those other litigations, it was held that service tax was not payable in absence of appropriate provision at the relevant D time and it became payable only w.ef April 18, 2006, when section 66A was inserted - Pursuant thereto, writ Petition was filed by the appellant and same was dismissed as barred by delay and /aches - Held: The legal position which is settled is that this service tax was not payable for the period in question inasmuch as such a liability E arose w.ej: April 18, 2006 - This legal position is not confined to only those who approached the Court but is a declaration of law - It can be treated as judgment in rem - Jn instant case, equities would be balanced by not insisting on payment of penalty and interest - Appellant approached belatedly, thus may not be entitled to refund of service tax already paid but at the same time, the appellant should F not be called upon to pay any interest and penalty levied on a tax which was not payable in law - Finance Act, 1994 - s.66A. Delay/Laches - Validity of dPTnand of service tax challenged after four years - Appellant received a show cause notice for non- payment of service tax - Appellant contested the said show cause G notice and challenged the legality of service tax - Validity of demand was confirmed by the Joint Commissioner of service tax - No statutory appeal filed by the appellant against the order - Appellant was aware that there were numerous other litigations pending - In those other litigations, it was held that service tax was not payable ~ Pursuant thereto writ Petition filed by the appellant, but was H 582 MIS. SHOELINE v. COMMISSIONER OF SERVICE TAX · 583 AND ORS . . , dismissed as barred by delay and /aches of four years -::- l)ivision. A Bench also concurred, thereby affirming the order - Held: After. Joint Commissioner had passed the order. no statutory appeal was preferred by the appellant challenging the order - When appellant had not challenged the demand and was merely watching the · proceedings in other similar cases, the decision in those cases cannot B famish any cause of action to the appellant to file the writ petition - Ther.efore, whenever it appears that the claimants lost time or whiled it away and did not rise to the occasion in time for filing the ·writ petitions, then in such cases, the court should be very slow in granting the relief to the incumbent- Constitution of India -Art.226. • Partly allowing the appeal, the Court c HELD: 1. The Joint Commissioner of service tax had confirmed the validity of demand of service tax vide order dated February, 2008. No statutory appeal was preferred by the appellant challenging that order. The writ petition was filed only in March, D 2012. During tltis period, the appellant was also making payment . towards service tax demanded by t.he respondents without challenging the order. The appellant now wants to take advantage of other litigation pending in respect of same subject matter. When. the appellant had not challenged the demand and was merely E sitting on the fence, watching the proceedings in other similar cases, the dei:ision in those cases cannot furnish any cause of · action to the appellant to file the writ petition. Law on this behalf ·is crystal clear. [Paras l and 9) [585-C; 587-G-H; 588-A-BJ 2. In the instant case, though the service tax levied for the · p period in question was to the tune of Rs.11,62,728/- which stands paid by the appellant, liability on account of penalty and interest is also fastened upon the appellant. The legal position which is settled is that this service tax was not payable for the period in question i.e. July 9, 2004 to March 31, 2006 inasmuch as such a liability arises only w.e.f. April 18; 2006 after·the insertion of the G relevant charging Section 66A ·in the Fina.nee Act, 1994. This · legal position is not confined to only
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