2015 (8) TMI 1317 - HC - Service Tax

Pre-deposit - challenge to the order directing the petitioner to deposit 25% of Service Tax - petitioner facing financial hardship - Held that - although the provision of Section 35F of Central Excise Act 1944 is not retrospective in operation yet this Court exercising writ jurisdiction over the matter and looking into the difficulties being faced by the appellant to obtain statutory remedy directs that if the petitioner deposits 7.5% of the duty amount within a period of four weeks from today the stay order shall remain in force till disposal of appeal by the CESTAT. - Petition disposed of

Summary

Issues:
Challenge to order of Customs, Excise and Service Tax Appellate Tribunal regarding deposit of Service Tax.

Analysis:
The petitioner sought to challenge the order passed by the Customs, Excise and Service Tax Appellate Tribunal directing the deposit of 25% of Service Tax amounting to Rs. 3.50 crores. The petitioner, through their counsel, highlighted financial hardship as the reason for non-compliance with the interim direction of the Tribunal. The counsel pointed out the introduction of Section 35F by the Parliament after the appeal was filed, which mandates a deposit before filing an appeal. Despite the provision not being retrospective, the Court, considering the difficulties faced by the petitioner, directed a deposit of 7.5% of the duty amount within four weeks to maintain the stay order until the appeal is disposed of by CESTAT.

The Court's decision to allow the petitioner to deposit 7.5% of the duty amount within a specified timeframe, despite the non-retrospective nature of Section 35F, showcases a balance between statutory requirements and the practical challenges faced by the appellant. By granting this relief, the Court ensures that the stay order remains in force until the appeal is resolved, providing a temporary respite to the petitioner while upholding the legal provisions introduced post the filing of the appeal. The issuance of urgent certified copies of the order further emphasizes the Court's prompt action in facilitating compliance with the directed deposit and maintaining the status quo during the appeal process.