2010 (1) TMI 819 - HC - Service Tax

Taxable event - for executing the services, the petitioner had received payment subsequently. - held that - the decision of Schott Glass Indis Pvt. Ltd.(2009 - TMI - 32436 - HIGH COURT OF GUJARAT) has a direct bearing on the issue. Going by the taxable event was defined by Section 65(105) of the Act were rendered well before 19-4-2006, the question of application of Rule 2(1)(d)(iv) is not correct. Hence, the taxable event cannot arise on the invoice amount for making the payment. The petitioner further pointed out that they have deposited more than 50% of the demand raised and hence pleads for waiver of the balance of amount payable under the demand - Held that - disposing the writ petition on 7-12-2009, this Court directed the petitioner to deposit a sum of Rs. 5.00 Lakhs within a period of three weeks from 7-12-2009. Since the copy of the order was received by the counsel for the petitioner, after the expiry of the three weeks period, the petitioner could not comply with the order.

Issues:
1. Challenge to the order in Application No. ST/S/100/09 in ST/169/09 dated 5-8-2009 [2010 (19) S.T.R. 728 (Tribunal)].
2. Levy of service tax for the period from 1999 to 2004.
3. Show cause notice for the period from October, 2001 to September, 2006.
4. Order demanding tax for the period from October, 2005 to 18-4-2006 and imposing penalty.
5. Dispute regarding pre-deposit amount of Rs. 10.00 lakhs.
6. Application for waiver based on Gujarat High Court decision.
7. Tribunal's order directing pre-deposit of Rs. 10.00 lakhs.
8. Counter filed by the respondents justifying the Tribunal's order.
9. Petitioner's plea for waiver of the balance amount payable under the demand.
10. Court's direction to deposit further sum of Rs. 5,00,000/-.

Analysis:
1. The petitioner challenged an order related to Application No. ST/S/100/09 in ST/169/09 dated 5-8-2009 [2010 (19) S.T.R. 728 (Tribunal)], which was an appeal before the CESTAT under the Service Tax Regulations. The petitioner, engaged in civil engineering and allied consultancy services, faced a show cause notice for service tax levy from 1999 to 2004, which was confirmed. Subsequent notices for the period from October, 2001 to September, 2006 led to penalties and demands. The petitioner appealed against these orders, leading to remands and further demands.

2. The petitioner's grievance centered around the Tribunal's order directing a pre-deposit of Rs. 10.00 lakhs without considering the case thoroughly. The petitioner argued for waiver based on a Gujarat High Court decision, emphasizing that the taxable event occurred upon service execution, not invoice receipt. The petitioner had already paid a significant sum, seeking a waiver for the remaining amount.

3. The Tribunal's order, dated 5-8-2009, addressed the pre-deposit issue differently for periods before and after 19-4-2006. It required the petitioner to pay Rs. 10.00 lakhs for the subsequent period, considering financial difficulties and previous payments. The respondents defended the Tribunal's decision, citing financial hardship and the need for compliance. The Court, satisfied with the prima facie case and payment made, directed the petitioner to deposit an additional Rs. 5,00,000/- within three weeks for expeditious appeal resolution.

4. The Court later allowed the petitioner ten more days to comply with the deposit order due to a delay in receiving the order copy. This extension aimed to ensure the petitioner's adherence to the payment directive issued on 7-12-2009, concluding the matter effectively.

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