2016 (9) TMI 692 - HC - Service Tax

Recovery of dues - Commissioner (appeals) rejected the appeal on the ground of period of limitation - appeal is pending before tribunal - Held that - the notice shall be kept in abeyance until a final decision is taken by the Tribunal in Appeal pending before the Appellate Tribunal.

Summary

Issues:
Challenge to notice under Section 87(b)(i) of Finance Act, 1994 for service tax payment along with penalty. Dispute regarding the timeline of receipt of appellate order and subsequent appeal filing. Allegations of hardship due to frozen accounts and client notifications.

Analysis:
The petitioner contested a notice (Ext.P5) issued under Section 87(b)(i) of the Finance Act, 1994, demanding service tax payment along with a penalty. The underlying issue stemmed from an assessment order (Ext.P1) by the Commissioner of Central Excise, confirming the service tax demand and penalty. The petitioner's appeal against this order was rejected (Ext.P3) by the appellate authority, leading to a further appeal before the Tribunal. The petitioner argued that the appeal filing with pre-deposit under Section 35F of the Central Excise Act should automatically stay further proceedings, rendering Ext.P5 invalid. Despite sending a lawyer's notice (Ext.P6) and highlighting the hardship caused by frozen accounts and client notifications, no action was taken by the authorities.

The respondents contended that the appellate order was passed on 29.10.2015 and served personally on the petitioner's authorized representative on 18.12.2015, triggering the appeal period expiry after 90 days. However, the petitioner claimed to have received the appellate order only on 11.05.2016, followed by a prompt appeal filing with the required pre-deposit. The petitioner argued that any delay in appeal filing should be determined by the Tribunal, not the Court. Despite the disputed timeline of receipt and appeal filing, the petitioner sought relief due to the potential hardship caused by Ext.P5's continuation.

In the judgment, the Court directed that Ext.P5 notice be suspended until the Tribunal reaches a final decision on the pending appeal. The Court instructed the 1st respondent to issue appropriate orders promptly and communicate them to the involved parties. By intervening at this stage, the Court aimed to alleviate the petitioner's difficulties arising from the notice's impact on operations and client relations.