2019 (3) TMI 249 - HC - Service Tax

Maintainability of appeal - condonation of delay in filing appeal - requirement with the pre-deposit - Held that - As far as the delay is concerned, the Tribunal will decide the issue on merits. Mandatory pre-deposit - Held that - Because of the financial hardship the petitioner has pleaded, the petitioner will pay the amount of pre-deposit in five equal monthly instalments. If the petitioner pays the first instalments in fifteen days from today, the Tribunal will consider the petitioner's delay petition and proceed further in accordance with law. Appeal disposed off.

Issues:
1. Demand for service tax under the Finance Act, 1994 for the period 2010-11 to 2013-14.
2. Appeal filed by the petitioner before the Tribunal facing hurdles of delay and mandatory pre-deposit requirement.
3. Petitioner seeking to pay the pre-deposit of 7.5% in instalments due to financial constraints.
4. Disagreement between the petitioner and the respondent on the permissible extension of time for compliance with pre-deposit.

Issue 1: Demand for service tax under the Finance Act, 1994
The petitioner faced a demand for service tax for the period from 2010-11 to 2013-14 under the Finance Act, 1994. Initially, the petitioner filed a writ petition despite the availability of an alternative remedy. However, later, during the pendency of the writ petition, the petitioner filed a statutory appeal challenging the demand.

Issue 2: Appeal hurdles - Delay and mandatory pre-deposit
The Tribunal faced two hurdles in numbering the appeal: a delay of 385 days and the mandatory requirement for the petitioner to deposit 7.5% of the tax due. The petitioner, citing financial constraints, sought the Court's intervention to allow payment of the pre-deposit in instalments, specifically requesting ten instalments to pay an amount exceeding ?2 crore.

Issue 3: Petitioner's request for instalment payments
The petitioner, due to financial hardship, requested to pay the mandatory pre-deposit of 7.5% in instalments. The Senior Standing Counsel for the respondent opposed the request, arguing that while the Court had previously extended the time for compliance with pre-deposit, allowing ten instalments would be impermissible. The petitioner's plea for instalments was aimed at alleviating the financial burden.

Issue 4: Disagreement on extension of time for compliance
The Senior Standing Counsel urged the Court to leave the decision on the delay issue to the Tribunal's discretion. The Court directed that the Tribunal would decide on the delay issue on merits. Considering the financial hardship pleaded by the petitioner, the Court ordered the petitioner to pay the pre-deposit amount in five equal monthly instalments. The Tribunal was instructed to consider the delay petition only after the petitioner paid the first instalment within fifteen days. The Tribunal would then proceed to adjudicate the issue on merits after the petitioner's compliance with the payment direction.

This detailed analysis covers the issues involved in the legal judgment, addressing the demand for service tax, the appeal hurdles faced by the petitioner, the petitioner's request for instalment payments, and the disagreement over the extension of time for compliance with the pre-deposit requirement.

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