2016 (9) TMI 789 - HC - Service Tax

Pre-deposit - Seeking grant of one more opportunity to present the case - proceedings have been completed ex-parte - Held that - as the appeal filed by appellant to the Tribunal is time barred, the petitioner cannot at this point of time approach to the Tribunal for re-considering the amount payable by the petitioner, for being entitled to for a fresh opportunity. The petitioner should abide by the condition to be imposed by this Court. Therefore, the petitioner is directed to pay 15% of the Service Tax demanded, viz., 15% of ₹ 45,70,803/-, within a period of three weeks from the date of receipt of a copy of this order and if the petitioner remits the same, he will be entitled to treat the impugned proceedings as a show cause notice and submit their objections within a period of two weeks thereafter and on receipt of the objections, the 1st respondent shall afford an opportunity of personal hearing to the petitioner or his authorised representative and re-do the assessment in accordance with law. - Petition disposed of

Summary

Issues: Service Tax liability under Fashion Designing Services for the period from April 2008 to March 2013, penalties imposed under sections 76 and 78 of the Finance Act, 1994, petitioner's failure to contest notices, granting one more opportunity to the petitioner, pre-deposit condition for re-appearing before the authority, direction to pay 15% of the Service Tax demanded.

Analysis:

The judgment pertains to a writ petition challenging an order-in-original directing the petitioner to pay Service Tax of ?45,70,803 under Fashion Designing Services for the period from April 2008 to March 2013, along with penalties imposed under sections 76 and 78 of the Finance Act, 1994. The petitioner, although raising contentions in the affidavit, admitted lack of diligence in contesting the matter when notices were issued. The court noted the petitioner's failure to engage with the proceedings initiated by the Department, emphasizing the statutory duty of the assessee to respond to notices and appear for personal hearings. Despite the ex-parte completion of proceedings, the court decided to grant the petitioner another opportunity, subject to certain conditions.

The court mandated a pre-deposit condition for the petitioner to pay 15% of the Service Tax demanded before re-appearing before the authority. The petitioner's counsel argued for a reconsideration of the amount, citing lower pre-deposit requirements for appeals before CESTAT. However, the court rejected this argument, highlighting the necessity for the petitioner to comply with the condition imposed. The petitioner was directed to remit 15% of the Service Tax demanded within three weeks, enabling them to treat the impugned proceedings as a show cause notice and submit objections within two weeks thereafter. Upon receipt of objections, the authority was instructed to provide a personal hearing to the petitioner or their representative and re-do the assessment in accordance with the law.

In conclusion, the writ petition was disposed of with the direction for the petitioner to pay the specified amount, granting them an opportunity to present objections and undergo a fresh assessment process. No costs were awarded, and connected miscellaneous petitions were closed as a result of the judgment.