Service Tax - Appeal - Pre-deposit - Pay or Perish? - Relief in Supreme Court
PLEASE recall our Story, "Service Tax - Appeal - Pre-deposit - Pay or Perish?" in TIOL- DDT 2285 - 03.02.2014.
In a service tax appeal, the adjudicating authority had confirmed a demand of about Rs. 33 Crores. The service was in relation to irrigation projects of the Government of Andhra Pradesh. The assessee would have been under the genuine impression that no Service Tax was payable as identically placed assessees were not paying any tax; the department targeted some contractors and issued notices. There was confusion with some parties getting relief at appellate stages and some not getting such benefit. In this case, the CESTAT ordered pre-deposit of about Rs. 30 Crores (of the 33 Crores demand) of tax and also ordered payment of interest in addition. Penalty was mercifully waived.
On appeal, the High Court passed a very quotable order observing that the indiscriminate denial of the power of waiver is like telling the party to pay or perish. However the High Court still ordered pre-deposit of 50 per cent of the tax demanded. The harried assessee had to approach the Supreme Court.
The Supreme Court on 19.02.2014 ordered:
Issue notice, returnable on 28th March 2014.
Dasti, in addition, is permitted.
No coercive steps shall be taken in the meantime for recovery of the amount in question.
So, the assessee is safe for another month or so.