2014 (9) TMI 37 - HC - Service Tax

Waiver of pre-deposit - tribunal dismissed the appeal for non compliance of stay order - Construction of residential complexes and commercial complexes - ownership - undue hardship - Held that - the order of the Tribunal directing payment of pre-deposit has been duly complied with by the appellant, though belatedly. - The word undue adds something more than just hardship. It means an excessive hardship or a hardship greater than the circumstances warrant - appeals restored to the file of the Tribunal - The Tribunal shall take up the appeals in the usual course and dispose of the same on merits and in accordance with law - decided in favor of asssessee.

Summary

Issues:
Challenging tribunal's order on non-compliance with pre-deposit, financial hardship plea, legal precedents consideration, undue financial hardship, compliance with pre-deposit, setting aside tribunal's order.

Analysis:
1. The appellant, a construction firm, faced demands for unpaid service tax on various projects. Despite seeking more time due to financial hardship, the tribunal dismissed the appeals for non-compliance with pre-deposit orders.
2. The appellant raised substantial questions of law regarding the tribunal's dismissal, citing financial hardship, legal precedents, and prior court decisions on service tax liability pre-amendment.
3. The High Court found the appellant belatedly complied with the pre-deposit order, emphasizing the construction industry's financial crisis. The court noted the compliance safeguarded revenue interests, directing the tribunal to decide the appeals on merits.
4. Referring to a Supreme Court decision, the court highlighted the need to balance undue hardship and revenue protection in pre-deposit orders under Section 35-F of the Act.
5. The court stressed the importance of proving undue hardship and imposing suitable conditions to safeguard revenue interests when considering pre-deposit waivers.
6. Consequently, the court set aside the tribunal's dismissal, restoring the appeals for consideration on merits without expressing an opinion on the substantial legal questions raised.
7. The appeals were ordered accordingly with no costs, and connected petitions were closed.

This detailed analysis covers the issues raised in the judgment comprehensively, focusing on the appellant's financial hardship plea, legal precedents, compliance with pre-deposit orders, and the court's decision to restore the appeals for further consideration.