Writ seeking waiver of mandatory 7.5% pre-deposit denied; statutory amendment removed discretion to waive pre-deposit requirement

HC dismissed the writ petition seeking waiver of the mandatory 7.5% pre-deposit for instituting an appeal before the CESTAT. The court held that statutory amendments removed judicial discretion to waive the pre-deposit, so financial hardship or partial payment (petitioner had paid a portion) cannot justify contravening the legislative mandate. Granting waivers would undermine the statute's scheme; therefore the remaining pre-deposit must be made for maintainability and the petition was refused.

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Issues:
Petitioner seeks relief from predeposit under Section 86 of the Finance Act, 1994 for appealing before CESTAT. The main issue is whether the mandatory pre-deposit of 7.5% required for instituting an appeal can be waived considering financial constraints.

Analysis:
The petitioner, engaged in laying power lines, challenged an order imposing service tax and penalty. The petitioner contended that the pre-deposit required was financially burdensome, seeking relief from the High Court. The petitioner had deposited a partial amount but found it impractical to pay the remaining balance.

The petitioner relied on precedents to argue that Article 226 could be invoked to seek relief from the mandatory pre-deposit. However, the respondent contended that post the 2014 amendment to Section 35F of the Central Excise Act, the power to waive pre-deposit was no longer available. The respondent cited Supreme Court decisions emphasizing non-interference with statutory mandates.

The Court noted that the amendment made pre-deposit mandatory, eliminating the discretion to waive it. Referring to the Dish TV India case, it was established that post-amendment, no waiver of pre-deposit was permissible. The Court highlighted that going against the statute would disrupt the legislative scheme.

Citing the Supreme Court's decision in Oil and Natural Gas Commission vs. Gujarat, the Court emphasized the importance of adhering to statutory mandates. Even though previous cases acknowledged rare instances for interference with statutory mandates, the Court refused to waive the pre-deposit in this case.

Ultimately, the Court dismissed the writ petition but granted the petitioner liberty to pay the balance pre-deposit within a month. The Court directed that if the payment was made and the appeal was in compliance with the law, the Tribunal would consider and decide the appeal on its merits.

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