Kumarakom Vadakkumbhagom Service Co-Operative Bank Ltd. Vs Commissioner of Central Tax (Kerala High Court)
The Kerala High Court dismissed a Customs Appeal filed by Kumarakom Vadakkumbhagom Service Co-Operative Bank Ltd. against an order by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Bangalore Bench. The core issue centered on the appellant’s failure to adhere to the mandatory pre-deposit requirement stipulated under Section 35F of the Central Excise Act, 1944. The appellant argued that the pre-deposit was only applicable when there was a demand for tax, and since they claimed no liability, the requirement was invalid. However, the court found this argument untenable. The records presented showed that a demand for service tax plus penalty had been issued against the appellant by an order dated 14.2.2019. This order had been previously challenged before the First Appellate Authority, which also rejected the appeal due to non-compliance with the pre-deposit rule.
The Kerala High Court, upon reviewing the submissions, determined that the appellant’s assertion lacked merit. The court emphasized that a specific demand had been raised by the original authority. The court referenced the Supreme Court’s ruling in Chandra Sekhar Jha vs. CCE [2022 (380) ELT 130], which established that pre-deposit is a prerequisite for entertaining an appeal. The sustainability of the tax demand was deemed the subject matter of the appeal itself, and therefore, the pre-deposit was a necessary condition. The appellant’s counsel then requested the court to allow the appeal to be contested on merits upon payment of the pre-deposit. However, the court stated that it lacked the authority to issue such a directive within the current proceedings. Consequently, the High Court dismissed the appeal, affirming the CESTAT’s order. The court clarified that the dismissal does not preclude the appellant from pursuing other legal remedies available under the law.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
