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Issues:
Challenge to validity of demand notice for service tax issued before 1-7-2003. Analysis: The petitioner contested a demand notice dated 29-6-2005, requiring payment of service tax and interest. The key issue was whether service tax was applicable to an amount received by the assessee before 1-7-2003, the date when service tax became leviable under Section 66 of the Finance Act, 1994. The respondent authorities believed that service tax was due even if the services related to the received amount were rendered after 1-7-2003, based on a Circular dated 5-11-2003. The Court decided not to delve into the legal aspects at that stage since no adjudication had occurred, instructing the petitioner to respond to the demand and show cause notices. The authority was directed to adjudicate the matter, and if a demand for service tax was made, it was to be put on hold until the issue was resolved by the CESTAT. Furthermore, the petitioner was permitted to challenge any adverse decision by the Assistant Commissioner, Commissioner (Appeals) of Service Tax, or CESTAT. Until the CESTAT issued a final decision, the petitioner was not obligated to pay the service tax if levied by the authorities. However, upon a decision against the petitioner by the Tribunal, compliance with the law was mandated. Consequently, the petitioner withdrew the petition and the challenge against the Circular. The Court disposed of the petition, making the rule absolute only to the extent specified, without any order as to costs.
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