Interim protection against service tax recovery was limited to past arrears, while future levy remained in force.

Interim protection was confined to coercive recovery of service tax arrears due on or before 30 September 2011, with the Court permitting the petitioners to move individual applications for interim relief and restraining recovery steps in the meantime. No stay was granted on the levy of service tax under section 65(105)(zzzz) read with section 66 of the Finance Act, 1994 for future liability from 1 October 2011, so the tax remained operative for subsequent periods.

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Issues: Whether interim protection was warranted against coercive recovery of service tax arrears, and whether there should be any stay on the imposition of service tax on future liability.

Outcome: Leave was granted and notice was issued on the prayer for interim relief.

Analysis: The Court permitted the petitioners to seek interim relief by individual applications and restrained coercive steps for recovery of arrears of service tax due on or before 30 September 2011. It clarified that there was no stay of the levy of service tax under section 65(105)(zzzz) read with section 66 of the Finance Act, 1994, in relation to future liability from 1 October 2011.

Outcome: Interim protection was granted only against recovery of past arrears, while the operation of the levy for future liability was left undisturbed.

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