Bank account freezing and instalment relief were refused for admitted service tax dues without proof of financial distress or security.

The petitioners sought withdrawal of a bank account freezing letter and permission to pay admitted service tax liability by instalments. Relief under the departmental circular was conditional on proof of financial distress, but no satisfactory material, including a complete balance sheet, was produced to establish such distress, and no security was furnished for the admitted amount. The Court held that releasing the freezing order would risk dissipation of funds and that the balance of convenience did not justify interim interference. The request for withdrawal of the freezing letter and instalment relief was therefore rejected.

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Issues: Whether the petitioners were entitled to have the bank account freezing letter withdrawn and to be permitted to discharge the admitted service tax liability by instalments.

Analysis: The petitioners had an admitted service tax liability, but the request for instalments under the departmental circular was conditional upon proof of financial distress. No satisfactory material, including the complete balance sheet, was produced to establish such distress. The petitioners were also unable to furnish security for the admitted amount. In these circumstances, the Court found that lifting the freezing order would expose the revenue to the risk of dissipation of funds, and the balance of convenience did not support interim interference.

Conclusion: The request to withdraw the freezing letter and to grant instalment relief was rejected.

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