Sovereign function nexus supports waiver of pre-deposit for election-related pandal and shamiana services

Pandal and shamiana services supplied to District Election Officers were treated as connected with the performance of a sovereign State function, and that prima facie position justified complete waiver of pre-deposit in the stay proceedings. On the admitted facts, the tribunal found a sufficient basis to suspend recovery of the service tax, interest and penalties during pendency of the appeal.

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Issues: Whether the appellant was entitled to waiver of pre-deposit of service tax, interest and penalties in respect of pandal and shamiana services provided to District Election Officers for performance of a sovereign function.

Analysis: The order records that the stay petition was for waiver of pre-deposit pending appeal. On the admitted facts, the services were rendered to District Election Officers, and the arrangement was treated as connected with performance of a sovereign function of the State. On that basis, a prima facie case for complete waiver of the amounts demanded was found.

Outcome: Pre-deposit of the service tax, interest and penalties was waived and recovery was stayed during pendency of the appeal.

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