By TIOL News Service:

MUMBAI, MAY 11, 2016: THE petitioner states that Service Tax department have initiated coercive action to recover the amount of tax which is yet to be ascertained. In other words for unascertained and uncrystallized dues, bank accounts of the petitioner have been frozen and attached and,therefore, the Service Tax Commissioner should be directed to release the bank accounts, it is pleaded.

The petitioner, in their letter dated 31.03.2016,admitted the service tax liability of Rs.12.77crores for the period 2010-11 till 2014-15. Adding up the dues till date would make the petitioner liable to pay Rs.18 crores plus interest.

The High Court observed that the petitioner had rendered services to various customers/clients, and the Invoices and bills have been raised on them and the price charged includes component of service tax; thus, service tax had been recovered from the clients/customers, who are recipients of the services, but there is default in depositing it in the Government treasury.

It was also noted that prima facie the letters of the petitioner on the subject of payment of Service Tax in Government Treasury do not indicate that there is any uncrystallized or unascertained dues, but known to the petitioner and non remittance thereof in Government Treasury would invite interest and penalty.

The High Court after considering the submissions ordered thus -

++ The petitioner to deposit sum of Rs.5crores with the respondents on or before 10th June, 2016 and produce proof of the same before the Registrar (O.S.), of such deposit on that day. Time to make payment shall not be extended and no application will be entertained even during vacation by this Court;

++ To enable petitioner to pay an amount of Rs.5crores, following three bank accounts of the petitioner shall be released temporarily forthwith.

++ Any default in compliance with the order shall result in the writ petition being dismissed without any further reference to this Court and these accounts can be reattached and refrozen.

(See 2016-TIOL-917-HC-MUM-ST)