Court dismisses writ petition in garnishee proceeding for service tax interest non-payment. Circular not applicable.

The court dismissed the writ petition in a case involving garnishee proceedings for non-payment of interest on delayed service tax. The petitioners' request for installment payments based on a circular was denied, as the court held that the circular did not apply to admitted tax. Emphasizing the obligation to pay self-assessed tax and interest on time, the court affirmed the validity of the garnishee notice under Section 87 of the Finance Act, 1994.

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Issues:
1. Garnishee proceedings initiated for non-payment of interest on delayed service tax.
2. Request for installment payment and release of bank accounts.
3. Applicability of Circular No. 996/3/2015-CX for granting installments.
4. Interpretation of self-assessed tax and admitted tax under the Finance Act, 1994.
5. Obligation to pay self-assessed service tax and interest within prescribed period.
6. Consideration of representation by Commissioner in light of Circular No. 996/3/2015-CX.
7. Issuance of garnishee notice under Section 87 of the Finance Act, 1994.

Analysis:
1. The Deputy Commissioner initiated garnishee proceedings against the petitioners for failing to pay &8377;69,33,281 interest on delayed service tax. The petitioners requested installment payments and release of bank accounts, citing Circular No. 996/3/2015-CX for recovery in installments.

2. The respondents opposed the request, arguing that the circular does not apply to admitted tax. The court noted that admitted tax is self-assessed tax, as per the Finance Act, 1994 and Service Tax Rules, 1994. The liability to pay self-assessed service tax within the prescribed period is binding, with interest charged for delays.

3. The petitioners contended that the Commissioner should consider their representation in line with the circular for installment payments. However, the court found the circular applicable to arrear dues, not self-assessed tax. The garnishee notice issued for non-payment of interest on self-assessed service tax was deemed valid.

4. Ultimately, the court dismissed the writ petition, emphasizing the obligation to pay self-assessed tax and interest on time. The judgment clarified the distinction between self-assessed tax and arrear dues, affirming the validity of the garnishee notice under Section 87 of the Finance Act, 1994.

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