The Delhi High Court has reaffirmed that any appeal questioning the taxability of a service—even when the immediate dispute is only about limitation—lies exclusively with the Supreme Court under Section 35L of the Central Excise Act, 1944. The decision, dated 2 July 2025 and delivered by Justices Prathiba M. Singh and Rajneesh Kumar Gupta in Commissioner of Service Tax Delhi II v. Shyam Spectra Private Limited (SERTA 5/2025), dismissed the Revenue’s petition filed under Section 35G.
The case arose from a ₹3.13‑crore service‑tax demand on Shyam Spectra, an internet‑service provider that supplies leased‑line connectivity to embassies and Software Technology Parks. The Commissioner’s show‑cause notice (SCN) of 19 October 2011 relied on the extended five‑year limitation period in Section 73(1) of the Finance Act 1994. CESTAT set the demand aside on 31 July 2024, holding the SCN time‑barred because there was no suppression of facts.
The Department appealed to the High Court, arguing that CESTAT had ruled only on limitation, not on the underlying exemption claimed under Notification 4/2004‑ST. Shyam Spectra countered that once limitation is resolved, the tribunal—or any subsequent court—must still decide whether the service is taxable, a question reserved for the Supreme Court by Section 35L.
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“Even if the question of limitation has been raised, the Court has to go into the merits of the matter after a decision on the question of limitation is made,”
the bench observed, echoing its earlier ruling in Commissioner of CGST & Central Excise v. SpiceJet Ltd. (2024).
Quoting Section 35L’s broad wording—“determination of any question in relation to the rate of duty or value for the purpose of assessment”—the judges noted that Parliament intentionally directed all tax‑rate or valuation disputes, however framed, to the Supreme Court. Where even one issue in an order concerns taxability, no slice of that order can be reviewed by a High Court under Section 35G.
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“The mere fact that the appellant is only aggrieved by the decision on the point of limitation would not make an appeal from the impugned order maintainable before this Court,” the judgment stresses.
Accordingly, the appeal was rejected as non‑maintainable, but the Court gave the Revenue liberty to pursue its remedy before the Supreme Court and to seek exclusion of the time spent litigating in the High Court for limitation purposes under Section 14 of the Limitation Act 1963.
Case no.: SERTA 5/2025
Case title: Commissioner Of Service Tax Delhi v. Shyam Spectra Private Limited
Appearance: Mr. Atul Tripathi, SSC with Mr. Gaurav Mani Tripathi & Mr. Shubham Mishra, Advocates for Appellant; Mr. J. K. Mittal with Ms. Vandana Mittal & Mr. Mukesh Choudhary, Advocates for Respondent
