High Court quashes Deputy Commissioner's order on Service Tax instalments, stresses need for Chief Commissioner approval

The High Court of Calcutta quashed the order passed by the Deputy Commissioner regarding the payment of arrear Service Tax by thirty-six instalments. The court found that the order did not have the required approval of the Chief Commissioner as per the circular, emphasizing the need for Chief Commissioner decision on such applications. The court distinguished a previous case and ruled in favor of the petitioners, allowing them to proceed in accordance with the law regarding the instalment request. The writ petition was disposed of without costs, and certified copies of the order were to be provided to the parties upon request.

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Issues: Challenge to order passed by Deputy Commissioner regarding payment of arrear Service Tax by thirty-six instalments.

The High Court of Calcutta was presented with a case challenging an order dated November 20, 2018, passed by the Deputy Commissioner (Technical) concerning the payment of arrear Service Tax by thirty-six instalments. The petitioners contended that the application for instalments, as per a circular dated February 28, 2015, should have been decided by the Chief Commissioner, not the Deputy Commissioner. The respondents argued that the application was directed to the Commissioner and was approved by the Commissioner, thus complying substantially with the circular. They emphasized that applicants must demonstrate financial distress and a reasonable cause for instalment grants, with frequent defaulters being excluded. The respondents cited a previous judgment to support their stance. The petitioners acknowledged the outstanding service tax and their application for thirty-six instalments, which was addressed to the Commissioner but decided by the Deputy Commissioner. The court noted that the impugned order lacked evidence of Commissioner approval and highlighted the circular's requirement for Chief Commissioner decision on such applications. The court distinguished a previous case involving attachment of a bank account due to lack of financial distress evidence. Consequently, the court quashed the November 20, 2018 order, allowing the parties to proceed as per the law regarding the instalment request. The writ petition was disposed of with no costs awarded, and certified copies of the order were to be provided to the parties upon request.

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