2018 (5) TMI 568 - HC - Service Tax

Maintainability of appeal - alternative remedy - sole reason for bypassing the appellate remedy cited before us is that the case involves complex accounting entries which the petitioner is in a position to reconcile - Held that - the statute requires pre-deposit of 7.5% for filing appeal before the Tribunal. In other words, even if the petitioner were to file appeal against the impugned order of the Commissioner, he would have to deposit 7.5% of the disputed demand - impugned order dated 30.8.2017 is set aside. Proceedings are placed back before the Commissioner for fresh consideration and disposal in accordance with law - petition disposed off.

Summary

Issues involved:
Challenging an order-in-original by Commissioner of Service Tax, bypassing appellate remedy, complex accounting entries, opportunity for petitioner to present case before Commissioner, requirement of deposit before remand, setting aside impugned order, fresh consideration by Commissioner, conditional deposit of sum, cooperation for expeditious disposal.

Analysis:

The petitioner directly challenged an order-in-original by the Commissioner of Service Tax, confirming substantial tax and penalty demands amounting to approximately ?2 crores each. The petitioner cited the reason for bypassing the appellate remedy as the complexity of accounting entries, which she believed she could reconcile given the opportunity. The petitioner contended that there was no default in payment of service tax and no delay in depositing it with the Government. The petitioner sought a chance to persuade the Commissioner, mentioning that a further hearing might be necessary after the initial hearing.

The respondents refuted the petitioner's claims, stating that the petitioner's hearing had already taken place on 18.7.2017, during which the petitioner submitted written submissions. The impugned order was passed after considering oral arguments and written submissions. The court acknowledged that the case involved complex factual issues and various entries, and thus, decided to grant the petitioner another opportunity to present her case before the Commissioner. However, this opportunity came with a condition - the petitioner was required to deposit a certain sum before the Commissioner as a condition for remand.

In setting aside the impugned order dated 30.8.2017, the court directed the proceedings to be placed back before the Commissioner for fresh consideration and disposal in accordance with the law. The petitioner was instructed to appear before the Commissioner through an authorized representative on a specified date, with a deposit of ?20 lakhs before that date. This deposit would remain with the Government and be adjusted based on the outcome of the adjudication proceedings. The petitioner was also required to cooperate for the expeditious disposal of the remand proceedings. Ultimately, the petition was disposed of based on these conditions and directions.