High Court overturns CESTAT's order, no predeposit required in service tax appeal

The High Court set aside the CESTAT's order directing the appellant to deposit the confirmed service tax amount, citing inconsistency among CESTAT members and a previous case precedent where unconditional leave for predeposit was granted. The High Court instructed the CESTAT to hear the appeal on merits without necessitating any predeposit, ultimately disposing of the appeal without costs to either party.

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Issues Involved:
The primary issue in this case is whether the CESTAT was justified in directing the appellant to deposit the entire amount of service tax confirmed by the Commissioner.

Details of the Judgment:

1. The appellant had provided buses on hire to a company and a school for transporting employees and students. The adjudicating authority initially dropped proceedings to recover service tax but later, the Commissioner held that the appellant was liable to pay service tax as a tour operator. The appellant appealed to the CESTAT with a request for waiver of predeposit. The CESTAT, in its order dated 19th April 2012, directed the appellant to deposit the entire confirmed service tax amount.

2. The CESTAT's order revealed a difference of opinion among its members regarding the predeposit issue. It was noted that in a similar case involving Jai Somnath Transport, the Tribunal had granted unconditional leave for predeposit. Consequently, the High Court quashed the CESTAT's order and directed it to hear the appeal on merits without requiring any predeposit.

3. The High Court's decision to set aside the CESTAT's order was based on the inconsistency within the Tribunal's members and the precedent set in a comparable case. The appeal was disposed of with no costs awarded to either party.

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