Service Tax - Appeal - Pre-deposit - Pay or Perish? - HC recalls its own order and remands case to CESTAT - Another Sad Stay Story
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. 2013-TIOL-1779-CESTAT-BANG
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 stay of recovery till 28th March 2014. The case was listed on two more days and on 07.05.2014, the Supreme Court allowed the assessee to withdraw the Special Leave Petition, so as to approach the High Court by filing a review application.
And the assessee returned to the High Court with a review petition.
In Review the High Court on perusal of the Tribunal's order found that several contentions urged on behalf of the petitioner were taken into account, and they were dealt with extensively. But from the order, it did not appear that the ground of financial incapacity or inability was dealt with by the Tribunal, obviously because it was not pressed. The discussion was undertaken mostly on the contentions, touching upon the legality, or prima facie case.
The High Court recalled its own earlier order and setting aside the Tribunal's order, remanded the case to the Tribunal for the exclusive purpose of paving the way for the petitioner to urge the ground of their financial weakness, or inability, before the Tribunal.
The Department was directed not to take any coercive steps to recover the amounts involved, till the disposal of the Stay petition by the Tribunal.
The Stay matter reached all the way till Supreme Court and it is back to where it all started.