Inability to pay Pre-Deposit can’t be ground for Invoking Writ Jurisdiction: Madras HC [Read Judgment]

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In the case of Sunmac Enterprises vs. The Commissioner of Central Excise, the Madras High Court held that inability to pay pre-deposit of 7.5 percent before the Commissioner (Appeals) cannot be a fit ground for invoking writ jurisdiction under Article 226 of the Constitution of India.

The Assessee-Company, in the instant case, has challenged an order passed by the revenue wherein it imposed service tax on the activity done by the assessee such as erection, maintenance, and repairs of street lights for the use of Municipal Corporation.

The above-said order was, later, confirmed by the first appellate authority.

The assessee approached the High Court through a writ petition contending that it did not get any relief from the lower authorities like CIT (A) and Customs, Excise and Service Tax Appellate Tribunal.

After considering the facts and circumstances the High Court Justice T.S.Sivagnanam has dismissed the writ petition filed by the assessee and observed that the assessee will not be able to pay the mandatory pre-deposit of 7.5% of the duty demanded. The court further stated that such inability to pay the mandatory pre-deposit cannot be a ground to entertain a writ petition.

“In my considered view, all the above three grounds cannot be a reason for bypassing the appeal remedy available under the Statute. The inability to pay the mandatory pre-deposit cannot be a ground to entertain a writ petition. Secondly, with regard to the decision in Enam Service Private Limited, prima facie, the Hon’ble Supreme Court was satisfied that question of law was involved and therefore, special leave petitions were entertained and were converted into civil appeals. Thirdly, in the assessee’s own case, the Tribunal recently rendered a decision, which, according to the petitioner, granted a partial relief. However, the order was not placed before the Commissioner,” the Court said.

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