2023 (3) TMI 1394 - AT - Service Tax

Interest liability for undue retention of deposits forced, by unfortunate circumstances and extraneous forces - applicant submitted that the precedent decisions on the extent to which interest liability for undue retention has been found equitable are on record - HELD THAT - It is only appropriate that a copy of this order may be placed before Revenue Secretary, Government of India and Chairman, Central Board of Indirect Taxes Customs (CBIC) with the request to consider issuing of instructions on accountability under Conduct Rules applicable to Central Civil Services, as well as legal requirement under the empowering statue, obliging tax authorities to respond to judicial determination.

Summary

Issues involved:
The issues involved in this judgment include non-compliance with the Tribunal's order, interest liability for undue retention, lack of effort by the Principal Commissioner to comply with the order, and the respondent-Principal Commissioner's reluctance to accept judicial determination.

Non-compliance with Tribunal's Order:
The Tribunal directed the refund along with consequential relief, which was only partially implemented by the respondent-Principal Commissioner. Despite granting adequate opportunity, the Principal Commissioner failed to comprehend the 'consequential relief' leading to a delay in the implementation of the order. The Tribunal had to intervene to address the inertia and directed the Principal Commissioner's presence at the next hearing to ensure compliance with the order.

Interest Liability for Undue Retention:
A miscellaneous application was disposed of with a direction on interest liability for the undue retention of deposits. The Tribunal directed a payout at 6% immediately, emphasizing the need for compliance with precedent decisions. The Principal Commissioner's lack of effort to comply with the order and the demonstrated unresponsiveness raised concerns about accountability and the need for punitive measures to ensure adherence to judicial determinations.

Reluctance to Accept Judicial Determination:
The respondent-Principal Commissioner displayed reluctance in accepting the Tribunal's judicial determination as binding. Despite being directed to file an affidavit affirming his stand, the Principal Commissioner demonstrated a belief that he was not accountable to any authority other than his own. The Tribunal, noting the Principal Commissioner's inactivity and unwillingness to act upon directions, decided to adjourn the matter for further submissions and to consider remedial measures to address such disinclination on the part of administrative authorities.

Conclusion:
The judgment highlighted the importance of compliance with Tribunal orders, accountability of tax authorities, and the need for punitive measures to ensure adherence to judicial determinations. The Tribunal's decision to adjourn the matter for further submissions and to consider remedial measures reflects the seriousness of the Principal Commissioner's non-compliance and reluctance to accept judicial directions. Additionally, a copy of the order was recommended to be placed before the Revenue Secretary and Chairman, CBIC, to consider issuing instructions on accountability under Conduct Rules applicable to Central Civil Services and legal requirements obliging tax authorities to respond to judicial determinations.