Pre-deposit waiver denied where deemed service tax liability and insufficient financial hardship failed to justify full interim relief.

A pre-deposit waiver request in a goods transport operator service tax matter was rejected because the demand was supported by a special deeming and validating scheme applicable to the service recipient, with liability treated as sustainable under Section 71A rather than being defeated by an objection based on Section 73. The applicants also failed to show financial hardship sufficient to justify complete waiver, as losses in the balance sheet were outweighed by available assets and deposits. On that basis, no prima facie case for total waiver was made out and the entire disputed service tax amount was required to be pre-deposited.

---

---

Issues: (i) Whether the appellants had made out a prima facie case for waiver of pre-deposit of the service tax demanded on the person availing goods transport operator services; (ii) Whether financial hardship justified waiver of the entire pre-deposit.

Issue (i): Whether the appellants had made out a prima facie case for waiver of pre-deposit of the service tax demanded on the person availing goods transport operator services.

Analysis: The liability was treated as arising from a special deeming and validating scheme applicable to the service availer, and not from Section 73 of the Finance Act, 1994. The demand was held to be sustainable through Section 71A, and the earlier objection based on non-applicability of Section 73 was rejected for the purpose of interim relief.

Conclusion: The appellants did not establish a prima facie case for total waiver of pre-deposit.

Issue (ii): Whether financial hardship justified waiver of the entire pre-deposit.

Analysis: The balance sheet showed losses, but the available assets and deposits were treated as sufficient to negate a plea of hardship for complete waiver.

Conclusion: Financial hardship was not made out to justify waiver of the entire pre-deposit.

Final Conclusion: The stay request failed and the appellants were required to make pre-deposit of the entire disputed service tax amount.

Ratio Decidendi: For interim stay in tax matters, waiver of pre-deposit is not warranted where the demand is supported by a valid deeming and validating provision and no sufficient prima facie case or financial hardship is shown.

---