Interim protection against coercive recovery granted during pending appeal and stay petition, subject to instalment payment of admitted balance.

Pending appeals and stay petitions against interest demand on delayed payment of admitted service tax, the HC granted interim protection against coercive recovery. The Court balanced the assessee's pending challenge and prior substantial deposits against the revenue's interest by directing payment of the admitted balance in two instalments. Coercive action was restrained until disposal of the stay petition or appeal, whichever occurred first, while the maintainability and merits of the appeals were left open.

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Issues: Whether coercive recovery of interest demand could be restrained during pendency of the assessee's appeal and stay petition, subject to payment of the admitted balance amount.

Analysis: The assessee had already filed appeals and stay petitions against the interest demand for earlier years and had made substantial deposits towards the demand. The demand arose towards interest on delayed payment of admitted service tax, and the Court noted the pendency of the stay petition before the appellate authority. In these circumstances, the Court granted interim protection from coercive action, while balancing the revenue's interest by directing payment of the admitted balance amount in two instalments. The Court expressly left open the maintainability and merits of the pending appeals.

Conclusion: Coercive action was restrained till disposal of the stay petition or appeal, whichever was earlier, subject to payment of the directed amount.

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