2018 (9) TMI 1214 - HC - Service Tax

Permission to make the pre-deposits required for the appeals preferred against the original orders - Held that - There is no time limit prescribed for making the pre-deposit. As such, no further direction is required for the petitioner to make the pre-deposit in relation to the appeal preferred against Ext.P2 order. However, in so far as the petitioner has not made a pre-deposit till date and have expressed willingness to make the pre-deposit, it is directed that further proceedings pursuant to the impugned notices shall be deferred for a period of ten days from today so as to enable the petitioner to make the pre-deposit. The petitioner is permitted to make the pre-deposit within ten days - petition allowed.

Summary

Issues: Challenge to orders under the Finance Act, 1994 for service tax payment without pre-deposit under section 35F, appeal rejections on that ground, challenge to orders before Appellate Tribunal, initiation of proceedings for realization of amounts covered by original orders, challenge to notices under section 87 of the Act.

Analysis:

The petitioner contested two orders under the Finance Act, 1994 for service tax payment without making the pre-deposit mandated by section 35F. The appeals against these orders were dismissed solely due to the non-compliance with the pre-deposit requirement, without delving into the merits of the case. Subsequently, the petitioner challenged these orders before the Appellate Tribunal, with one appeal pending and the other disposed of in favor of making the pre-deposit for a thorough appeal consideration. However, the petitioner failed to make the pre-deposit as directed, leading to the authorities initiating proceedings for the recovery of the outstanding amounts through notices issued under section 87 of the Act to the petitioner's bank.

Upon hearing both parties, the court noted the petitioner's failure to comply with the pre-deposit requirement as per the Appellate Tribunal's order. In the absence of any interim relief or deposit made by the petitioner, the court found no fault with the authorities for commencing the recovery proceedings for the amounts specified in the original orders.

In response to the petitioner's request to allow the pre-deposits for the pending appeals, the court observed that the Appellate Tribunal's order did not specify a time limit for the pre-deposit. Consequently, the court directed the petitioner to make the pre-deposit within ten days to halt further actions based on the challenged notices. The court granted a similar opportunity for the appeal related to the other order, permitting the petitioner to make the pre-deposit within the same timeframe to suspend any enforcement actions. Ultimately, the writ petition was disposed of in accordance with these directions, providing the petitioner with a limited window to fulfill the pre-deposit requirement for the pending appeals.