2014 (6) TMI 867 - HC - Service Tax

Waiver of pre-deposit of service tax - commercial and industrial construction services - Residential complex services - it was contended that, petitioner neither charged the service tax from the said Board nor the Board paid the amount on such account and, therefore, any direction to deposit the service tax would cause a serious financial hardship which the Tribunal ought to have considered at the time of disposal of the said application. - Held that - It appears to the Court that the challenge is basically made on the wrong recording of the submissions made before the Tribunal as the Tribunal recorded that the petitioner admitted liability towards by service tax to the tune of Rs. 40 lacs and odd as per Chart produced before the Tribunal. The petitioner, if felt aggrieved by such wrong recording, has to approach the same Authority promptly before it fades from its memory. From the Chart filed before the Tribunal it appears that the West Bengal Housing Board have communicated the liability on the works contract service and the liability upon service tax at Rs. 40,81,074/-. Though the Tribunal should not have used the expression admitted but meaningful reading of the written submission as well as the Chart annexed thereto does not lead to any confusion that the liability is foisted upon the petitioner towards service tax to the tune of Rs. 40 lacs and odd. The liability which is apparent and prima facie appears to be a liability of the contractor under the work order of the contract, the Tribunal in my considered view has not committed any illegality in directing the petitioner to deposit the amount shown in the said Chart after deducting the amount already paid by the petitioner. - The petitioner has volunteered in depositing Rs. 5 lacs with the department on account of service tax. It is manifest from the materials placed from the record that the petitioner, who is working as a contractor would suffer greater hardship if the entire amount is directed to be deposited with the Service Tax Authority. This Court feels that to bring the equilibrium the petitioner is directed to furnish a Bank Guarantee to the said sum of Rs. 35,81,074/- within a week from date. - tribunal to dispose off the appeal expeditiously - Decided conditionally in favour of assessee.

Summary

Issues:
Challenge to order passed by Customs, Excise & Service Appellate Tribunal regarding waiver of pre-deposit of service tax based on alleged admission of liability by petitioner.

Detailed Analysis:
The petitioner contested an order by the Tribunal claiming that the recorded admission of liability towards service tax was incorrect. The petitioner argued that the work order from the West Bengal Housing Board did not include service tax, and thus the demand was unjustified. The petitioner also highlighted a letter from the Board expressing intent to seek exemption from service tax for certain construction work.

The Court noted that the petitioner had already deposited a sum towards service tax and that the Board's letter did not explicitly exempt the petitioner from the tax liability. The Chart submitted by the petitioner indicated a service tax liability of Rs. 40,81,074. The Court found that the Tribunal's direction to deposit this amount, after deducting the sum already paid, was not illegal.

The petitioner raised a legal argument regarding the Tribunal's obligation to follow a consistent view. Citing a precedent, the petitioner argued for total waiver of the pre-deposit. However, the Court differentiated the facts of the cited case from the present situation, emphasizing the lack of granted exemption in the current case.

The Court also discussed the importance of respecting judicial decisions for maintaining consistency. Additional judgments cited by the petitioner were analyzed, emphasizing the need for adherence to established legal principles and decisions.

In consideration of the petitioner's potential financial hardship, the Court directed the petitioner to provide a Bank Guarantee for a reduced sum within a week. Failure to comply would allow the Department to proceed with recovery. The Tribunal was urged to expedite the appeal process.

Ultimately, the Court dismissed the writ application, emphasizing that the petitioner's arguments lacked merit. No costs were awarded, and parties were instructed to receive certified copies promptly.