By TIOL News Service

CHENNAI, SEPT 11 2015: THE assessee is engaged in construction service. A Show Cause Notice was issued to the assessee demanding Service Tax for the period 2007-2011. The assessee replied to the notice contesting the demand on the ground that the explanation inserted vide Finance Act, 2010 is only prospective as also clarified by the Board vide Circular dated 10.02.2012. However, the Adjudicating Authority confirmed the demand. Aggrieved by the same, the assessee filed a Writ Petition before the High Court.

The assessee submitted that, the reasoning of the respondent is contrary to the provisions and the decisions of the Hon'ble Apex Court that any amendment by way of insertion to a provision can be applied only prospectively and the Circulars issued by the Board clearly confirm that the Explanation is effective from 01.07.2010, which are binding on its officers.

Besides, according to the learned counsel for the petitioner, the question of applicability of substituted Section 35-F of the Finance Act, to the orders passed after 06.08.2014 or to the appeals filed on or after 06.08.2014, is still pending consideration before the Division Bench of this Court, irrespective of the final orders by Kerala High Court reported in 2015-TIOL-895-HC-KERALA-ST Kerala and the interim orders of the Andhra Pradesh High Court reported in 2015-TIOL-511-HC-AP-CX. In the circumstances, filing appeal against the impugned order by mandatorily depositing 7.5% of the amount demanded will not only make hardship to the petitioner but also will lead to depriving right of appeal without pre-deposit of 7.5% of the said amount.

After hearing both sides, the High Court held:

Considering the submissions on either side and in view of the fact that the applicability of Section 35 F of the Finance Act is pending consideration before the Division Bench of this Court, this Court permits the petitioner to file an appeal along with waiver application, within a period of two weeks from the date of receipt of a copy of this order. Since the matter is pending before the Division Bench of this Court, testifying the validity of Section 35-F of the Finance Act, relating to pre-deposit, the appellate authority is directed to receive the appeal along with waiver application filed by the petitioner, which would be subject to the result of the issue pending before the Division Bench.

(See 2015-TIOL-2095-HC-MAD-ST)