Court upholds service tax liability of petitioner company despite management change, allows installment payments.

The court dismissed the challenge against Ext.P9 notice for recovery of service tax dues against the petitioner-company, affirming the company's liability to pay the confirmed amounts. The court held that the change in management does not exempt the company from its obligations, emphasizing that liabilities confirmed by statutory authorities must be honored regardless of management changes. In light of the petitioner's financial difficulties, the court directed the company to discharge its liability in ten equal monthly installments and allowed pursuit of recovery from the previous management for the tax amounts paid.

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Issues: Challenge against Ext.P9 notice for recovery of service tax dues, liability of petitioner-company, impact of change in management, financial difficulties faced by petitioner-company.

Analysis:

1. Challenge against Ext.P9 Notice: The writ petition challenges Ext.P9 notice issued to recover service tax dues confirmed on the petitioner company. The petitioner argued that the management change absolves them from the liabilities confirmed before the change. The court noted that the order confirming the dues was not challenged in any appellate proceedings, indicating the petitioner did not dispute the liability. The court held that the change in management does not exempt the company from paying confirmed amounts, dismissing the challenge against Ext.P9 communication.

2. Liability of Petitioner-Company: The court found that the demand for service tax dues, interest, and penalty was valid against the petitioner-company. The order from the Deputy Commissioner of Central Excise was undisputed by the petitioner. The court emphasized that the change in management does not release the company from its liability to pay confirmed amounts. The court held that the challenge against Ext.P9 order could not be legally sustained, affirming the liability of the petitioner-company.

3. Impact of Change in Management: The petitioner claimed that the change in management absolved them from liabilities confirmed before the change. However, the court held that the change in management does not exempt the company from paying confirmed amounts. The court emphasized that the new management's lack of awareness of past orders does not negate the company's liability. The court's decision was based on the principle that liabilities confirmed by statutory authorities must be honored irrespective of management changes.

4. Financial Difficulties of Petitioner-Company: The petitioner informed the court about the financial difficulties faced by the company. In consideration of this, the court directed the petitioner to discharge its liability in ten equal monthly installments starting from a specified date. The court ordered that further recovery proceedings against the petitioner would be put on hold if the installment plan was followed. The court also allowed the petitioner to pursue recovery from the previous management for the tax amounts paid by them.

In conclusion, the court upheld the liability of the petitioner-company to pay the confirmed service tax dues, emphasizing that a change in management does not absolve the company from its obligations. The court provided a structured installment plan considering the financial difficulties faced by the petitioner, while also allowing pursuit of recovery from the previous management.

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