Where Assessee has made pre-deposit as directed by Commissioner (A), Dept cannot make coercive recovery during pendency of Stay Application

In the instant case, Orissa Stevedores Ltd. (the Petitioner) filed a Writ Petition before the Hon’ble High Court of Orissa with a prayer to quash the notice dated August 20, 2014 issued by the Revenue for recovery of Rs. 11,44,54,732/- levied towards interest from the Petitioner for the period from 2010-11 to 2013-14. The further prayer of the Petitioner was for issuance of a Writ of Mandamus to the Revenue for not taking any coercive action against the Petitioner during pendency of Stay Applications.

The Petitioner argued that, against interest, it had filed an appeal before the Ld. Commissioner (Appeals) along with Stay Applications and had made pre-deposit as directed by him. It was further submitted that since no officer has been posted as the Commissioner (Appeals), the appeals along with the Stay Application filed by the Petitioner could not be disposed of and pending disposal of Stay Application, the Revenue are not justified to take any coercive action against the Petitioner.

On the other hand, the Revenue argued that interest has been demanded for Service tax admitted by the Petitioner in his own return and since interest is mandatory, no appeal lies against it and further, there is no question of limitation for levy of interest as ST-3 returns were assessed and Service tax liability has already been paid.

The Hon’ble High Court of Orissa after observing that the Petitioner themselves  has filed a sheet during the course of hearing showing computation of interest as per which they admit payment of interest of Rs. 2.17 crore still pending on them, directed that the Petitioner must pay Rs. 2.17 crore admitted by them. However, the Hon’ble High Court directed the Revenue not to take any coercive action against the Petitioner as regards balance dues till disposal of appeal by Commissioner (Appeals).