High Court Upholds Tribunal Order Requiring Deposit Pending Service Tax Appeal

The High Court upheld the order of the Central Customs, Excise and Service Tax Appellate Tribunal, directing M/S Bharat Sanchar Nigam Ltd. to deposit Rs. 2.00 crores pending a Service Tax Appeal. The court found the petitioner to be in default of service tax payment, emphasizing that prior excess payments did not excuse the outstanding amount. The court also noted that the Tribunal had considered the petitioner's payment in its order. The petition was dismissed, underscoring that the petitioner's public sector status did not exempt it from tax obligations, and the deposit requirement was justified considering the total demand, penalty, and interest.

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Issues Involved:
The issues involved in this case are related to a petition filed under Article 226 of the Constitution by M/S Bharat Sanchar Nigam Ltd. against an order made by the Central Customs, Excise and Service Tax Appellate Tribunal, East Regional Bench, Kolkata, regarding the deposit of a sum of Rs. 2.00 crores pending in a Service Tax Appeal.

Judgment Details:

Issue 1: Deposit of Amount Pending Appeal
The petitioner, a public sector undertaking, argued against being directed to deposit the amount pending appeal, citing excess payment made in 2008. However, the court found that the petitioner was indeed in default of payment of service tax for multiple years. The court held that the direction to pay Rs. 2.00 crores pending the appeal was not unreasonable, considering the total demand, penalty, and interest. The court dismissed the petition, stating that making payment later does not excuse earlier short payments.

Issue 2: Consideration of Payment Made
The petitioner's advocate argued that a payment made by the petitioner was not considered by the Tribunal. The court disagreed, noting that the Tribunal had referred to the payment in question in the impugned order.

In conclusion, the court dismissed the petition, emphasizing that the petitioner's status as a public sector corporation did not exempt it from fulfilling its tax obligations, and the direction to deposit the amount pending appeal was deemed reasonable in light of the overall demand, penalty, and interest.

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