Unaware of RBI Portal to make Pre-Deposit u/s 35F of CEA: Jharkhand HC Grants Relief to Unregistered Dealer [Read Order]

The unregistered dealer who failed to pay service tax and also the pre-deposit required by section 35F of the Central Excise Act of 1944 received relief from the division bench consisting of Acting Chief Justice Aparesh Kumar Singh and Justice Deepak Roshan.

Petitioner, M/s Mukesh Kumar Singh, a non-registered dealer / Government contractor engaged in providing construction services to the State Government, on an impression that it is exempted from the levy of service tax. As a result, he didn’t pay the service tax.

Further, he got a show-cause notice issued by the Assistant Commissioner. The Petitioner participated in the proceeding, but by Order-in-Original, the petitioner was saddled with the liability of service tax to the tune of Rs. 1,87,392 with interest and penalty, treating the same as income of the petitioner.

According to the petitioner's counsel, the petitioner was unable to pre-deposit interest and penalty payments online since it was an unregistered dealer. The petitioner felt he was excluded from the Act's registration requirements because he is a government contractor and his services are exempt.

It was also submitted that he was unaware of the facility of making online payments through the Reserve Bank India (RBI) portal. Further, the petitioner did not have any intention to avoid making a pre-deposit but was unaware of RBI Instruction No. RBI/2008-09/165 dated 05.09.2008, he could not make online payment of pre-deposit.

The respondent's counsel has raised objections to the plea of non-payment of pre-deposit under section 35F of the CEA. It was claimed that paragraphs 15 and 17 of the counter affidavit addressed the petitioner's claim that the obligatory pre-deposit of 7.5% of the Duty was not paid. According to the argument, the decision to reject the appeal due to the non-payment of the pre-deposit was legal and not arbitrarily made.

After hearing both sides, the bench set aside the impugned order passed by the GST Commissioner (Appeals) and also directed the petitioner to remit the mandatory pre-deposit within 4 weeks.

To Read the full text of the Order CLICK HERE

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