Supreme Court directs payment of service tax arrears in instalments with no stay on future liabilities

The Supreme Court granted leave in SLP (C) No. 34002/2011, directing the appellants to clear arrears of service tax in three instalments by specified dates to avoid coercive recovery measures. The Court clarified that there is no stay on future service tax liability from 1st January, 2012 onwards. The judgment was tagged with Civil Appeal No. 8390 of 2011 for reference and further proceedings.

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Issues involved: Stay of recovery of arrears of service tax, future liability towards service tax.

Stay of recovery of arrears of service tax:
The Supreme Court granted leave in SLP (C) No. 34002/2011 and directed that the appellants clear all arrears of service tax due as on 31st December, 2011 in three equated instalments by specified dates - 29th February, 2012; 30th April, 2012; and 30th June, 2012. It was specified that no coercive steps shall be taken against the appellants for recovery of arrears if the instalments are paid on time. However, in case of default in depositing any instalment by the due date, the respondents are permitted to recover the entire amount in arrears immediately.

Future liability towards service tax:
The Supreme Court clarified that there is no stay of imposition of service tax u/s sub-clause (zzzz) of clause (105) of Section 65 read with Section 66 of the Finance Act, 1994 (as amended) for the future liability towards service tax from 1st January, 2012 onwards. This means that the appellants are still liable to pay service tax for future transactions from the specified date.

Civil Appeal No. 8390 of 2011:
The judgment was tagged with Civil Appeal No. 8390 of 2011 for reference and further proceedings related to the case.

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