2011 (10) TMI 12 - SC - Service Tax

Renting of immovable property - Stay - Held that - all the appellants in each of the appeals, who are before us, shall deposit with the concerned department 50% of the arrears towards the said tax within six months in three equated instalments, on or before 1st November, 2011; 1st January 2012 and 1st March, 2012 - Stay is subject to conditions.

Summary

Issues:
1. Stay order for arrears of service tax due from members of various appellant associations.
2. Conditions imposed by the court for the stay order.
3. Clarifications regarding the interim order and consequences of default.

Analysis:
1. Stay Order for Arrears of Service Tax:
The Supreme Court heard appeals related to arrears of service tax due from members of different appellant associations. The court directed the members to deposit 50% of the arrears in three equal instalments within six months, with specific deadlines for each instalment. The remaining 50% was required to be secured with a solvent surety to the satisfaction of the jurisdictional Commissioner. Individual affidavits undertaking to pay the balance arrears were to be filed within four weeks. The court clarified that the interim order applied only to members who were petitioners before the High Court in the writ petition leading to the appeal.

2. Conditions Imposed by the Court:
In addition to the deposit requirements, the court mandated the successful party in the appeal to be entitled to interest on the amount stayed by the court, with the rate to be determined at the final disposal of the appeal. Any default in depositing the instalments by the specified dates would lead to the vacation of the stay order. In such cases, the department would be permitted to recover the balance amount in accordance with the law. The court expedited the hearing of the appeals considering the issue and revenue involved.

3. Clarifications and Consequences of Default:
The court emphasized that any default in depositing the instalments as per the prescribed deadlines would result in the vacation of the stay order. It was made clear that the department could then proceed to recover the remaining amount as per legal provisions. The court also allowed for the filing of rejoinder affidavits, if necessary, within two weeks after the counter affidavit was filed by the respondents. Furthermore, an application for impleadment was dismissed as the applicant intended to file a substantive petition instead.

This judgment by the Supreme Court outlined strict conditions for the stay order on arrears of service tax, ensuring compliance by the appellant associations and members. The detailed directives aimed to balance the interests of the parties involved while safeguarding the revenue and legal procedures.