Conditional quashing of service tax demand granted with deposit-based remand for fresh adjudication on merits.

The Madras High Court dealt with a service tax demand confirmed after a show cause notice invoking the extended period of limitation. The Court granted limited relief by directing deposit of 25% of the disputed tax in cash within 30 days; on compliance, the impugned order would stand quashed and the matter would be reconsidered by the adjudicating authority on merits after receipt of the reply to the show cause notice. The relief was conditional and required the petitioner's cooperation in the fresh adjudication.

---

---

Issues: Whether the impugned order confirming service tax demand was liable to be quashed and the matter remitted for fresh adjudication, subject to deposit of a part of the disputed tax.

Analysis: The dispute arose from a show cause notice invoking the extended period of limitation and culminating in confirmation of service tax and cess for the relevant period. Considering the submissions on merits and the request for conditional relief, the Court granted limited indulgence by requiring deposit of 25% of the disputed tax in cash within 30 days. On compliance, the impugned order was to stand quashed and the matter was to be reconsidered by the adjudicating authority after receipt of reply to the show cause notice, with cooperation from the petitioner.

Conclusion: The impugned order was quashed conditionally, and the matter was remitted for fresh decision on merits after compliance with the deposit condition.

---