Dismissal of Writ Petition Challenging Recovery Notice Despite Pending Tribunal Appeal

The Court dismissed the writ petition challenging a recovery notice for service tax/penalty/interest, directing deposit within seven days, despite an appeal pending before the Tribunal with a stay application. The Court noted the absence of property attachment or auction and advised the petitioner to seek an early hearing before the Tribunal if urgent, rather than filing the writ petition. The Court distinguished a prior judgment on the Circular prohibiting coercive recovery during appeal pendency due to lack of evidence and circumstances, ultimately dismissing the petition for lack of merit.

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Issues:
Challenge to notice for recovery of service tax/penalty/interest, Urgency in staying recovery pending appeal before Tribunal, Application of Circular dated 2-3-1990 on recovery measures during pendency of appeal.

Analysis:
The petitioner challenged a notice issued for recovery of service tax/penalty/interest by respondent No. 1, directing deposit within seven days under the Finance Act, 1994, failing which recovery action would be initiated. The petitioner received a show cause notice in 2009 for non-payment of service tax, leading to a demand raised in 2011. Despite appeals, including one before the Appellate Tribunal with a stay application pending for hearing on 2-4-2012, the recovery notice was issued on 28-1-2012, prompting the petitioner's plea for staying recovery until the Tribunal's decision. The petitioner cited a relevant judgment in support of the stay application.

The Court examined the notice, finding it a general directive to all parties/service providers for tax payment. It noted the specific order against the petitioner for Rs. 1,64,499/-, upheld by the Commissioner of Appeals, with an appeal pending before the Tribunal along with a stay application scheduled for 2-4-2012. The Court highlighted the absence of property attachment or auction despite the notice, filed on 16-2-2012, with the Tribunal hearing already set for 2-4-2012. It advised the petitioner to seek an early hearing before the Tribunal if urgent, rather than filing the writ petition.

Referring to a prior judgment, the Court discussed the Circular dated 2-3-1990 prohibiting coercive recovery during appeal pendency before appellate authorities. However, it found the petitioner had not informed the respondents of this Circular, nor provided evidence of property attachment or auction notices. Consequently, the Court distinguished the prior judgment based on the lack of similar circumstances in the present case. Given the Tribunal's upcoming hearing date, the Court advised the petitioner to request an early hearing if concerned about property attachment, ultimately dismissing the writ petition for lack of merit.

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