2019 (3) TMI 1335 - HC - Service Tax

Application for grant of installments for Payment of Service Tax - Circular dated February 28, 2015 - Deputy Commissioner denied permission - whether Deputy Commissioner have power to do so in term of circular - Held that - Although, the impugned order records that, the same was issued with the approval of the Commissioner, there is no material on record to establish that, the impugned order was passed with the approval of the Commissioner. In any event, neither the Commissioner nor the Deputy Commissioner (Technical) has the authority to consider a prayer for grant of thirty six instalments in view of the circular dated August 28, 2015. The writing dated November 20, 2018 is quashed. The parties are at liberty to proceed in accordance with law with regard to the request for grant of installments - Petition disposed off.

Summary

Issues: Challenge to order passed by Deputy Commissioner regarding payment of arrear Service Tax by thirty-six instalments.

The High Court of Calcutta was presented with a case challenging an order dated November 20, 2018, passed by the Deputy Commissioner (Technical) concerning the payment of arrear Service Tax by thirty-six instalments. The petitioners contended that the application for instalments, as per a circular dated February 28, 2015, should have been decided by the Chief Commissioner, not the Deputy Commissioner. The respondents argued that the application was directed to the Commissioner and was approved by the Commissioner, thus complying substantially with the circular. They emphasized that applicants must demonstrate financial distress and a reasonable cause for instalment grants, with frequent defaulters being excluded. The respondents cited a previous judgment to support their stance. The petitioners acknowledged the outstanding service tax and their application for thirty-six instalments, which was addressed to the Commissioner but decided by the Deputy Commissioner. The court noted that the impugned order lacked evidence of Commissioner approval and highlighted the circular's requirement for Chief Commissioner decision on such applications. The court distinguished a previous case involving attachment of a bank account due to lack of financial distress evidence. Consequently, the court quashed the November 20, 2018 order, allowing the parties to proceed as per the law regarding the instalment request. The writ petition was disposed of with no costs awarded, and certified copies of the order were to be provided to the parties upon request.