Service Tax - Services provided by Rajasthan Police - Appeal Before CESTAT and Suit Before Supreme Court - No Two Remedies
THE State of Rajasthan filed a Suit in the Supreme Court praying for a declaration that the levy of service tax on the plaintiff in relation to the activities of providing/deploying additional police force at various Banks/Institutions/Organisations or at various events and the work of character verification for the purpose of maintaining law and order situation as per the provisions of Section 11 and 46 of the Rajasthan Police Act, 2007 is violative of Article 289 of the Constitution of India and therefore without authority of law and declare that the adjudication orders passed levying service tax on the plaintiff and the action of collection/recovery of service tax from the plaintiff is without jurisdiction.
In nutshell, the case of the plaintiff, State of Rajasthan is that no service tax is payable on the activity of the Rajasthan Police in providing/deploying additional police force at various Banks/Institutions/Organisations etc.
The Union of India apart from contesting the suit on merit raised a preliminary objection to the maintainability of the suit.
The Union of India stated that:
1. a show cause notice was issued to the plaintiff by the Adjudicating Authority and after the plaintiff filed its reply, the Adjudicating Authority held that service tax was payable on the aforesaid services rendered by the plaintiff.
2. Against the order passed by the Assessing Officer, the plaintiff had even preferred an appeal before the Commissioner, Central Excise, Jaipur, which appeal was dismissed by the Commissioner.
3. Not only this, against the order of the Commissioner, the plaintiff has filed statutory appeal before the Customs Excise & Service Tax Appellate Tribunal (CESTAT), which is pending consideration by the CESTAT.
4. Since the statutory remedy under the Finance Act has been availed by the plaintiff seeking the same relief, the present suit, therefore, would not be maintainable as the plaintiff cannot invoke two remedies for one cause of action.
The Supreme Court held,
"Even if it is presumed that the suit was maintainable, at the same time the plaintiff also had remedy of filing the statutory appeals etc. by agitating the matter under the Finance Act. It chose to avail the remedy under the Finance Act. The Doctrine of Election would, therefore, become applicable in a case like this. After choosing one particular remedy the plaintiff cannot avail the other remedy as well, in respect of the same relief founded on same cause of action."
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