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of <h1>High Court Overturns Tribunal's Service Tax Pre-Deposit Order, Emphasizes Reevaluation</h1> <h3>WESTINGHOUSE SAXBY FARMER AND CO. LTD. Versus UNION OF INDIA</h3> WESTINGHOUSE SAXBY FARMER AND CO. LTD. Versus UNION OF INDIA - 2014 (36) S.T.R. 1243 (Cal.) , 2014 (313) E.L.T. 44 (Cal.) Issues:Challenge to order of Customs, Excise and Service Tax Appellate Tribunal regarding pre-deposit amount in a writ petition.Analysis:In this case, the petitioner challenged the order of the Customs, Excise and Service Tax Appellate Tribunal, East Regional Bench, Kolkata, which directed the petitioner to deposit a sum of Rs. 50 lakhs as a pre-deposit without properly considering whether the project in question was a turnkey project or not. The petitioner, a government undertaking and a sick company, argued that the period of limitation under Section 73 of the Finance Act, 1994 cannot be extended. The Tribunal, however, in paragraph 5 of the impugned order, concluded that the petitioner is liable to pay service tax based on the nature of the contracts. The petitioner contended that the Tribunal should have considered whether a prima facie case for waiver of pre-deposit was made out or not. The respondent, representing the service tax authorities, argued in favor of the order, claiming it to be just and proper.The High Court observed that the Tribunal prematurely concluded that the petitioner was liable to pay service tax without properly assessing the nature of the project contracts. Consequently, the High Court set aside and quashed the order of the Tribunal dated 25th April, 2011, along with the order on the application for modification dated 29th July, 2011. The Court directed the Tribunal to hear the appeal within four months from the date of presenting a certified copy of the order. It was emphasized that the observations made in the order were tentative and should not be relied upon by the Tribunal during the adjudication of the appeal.In conclusion, the High Court allowed the writ petition, highlighting the need for a proper assessment of the petitioner's liability to pay service tax and directing the Tribunal to reconsider the matter within a specified timeframe. The Court also clarified that the observations made in the order were not binding during the appeal process. An urgent certified copy of the order was directed to be furnished to the concerned parties promptly.
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