Facts of the Case

A.S. Aniyan Pillai, a contractor providing works contract services to the Public Works Department, Government of Kerala, was directed by an order dated 28.12.2021 to pay Rs. 12,47,756 as service tax.

He appealed against that order, but the appeal was dismissed by order dated 23.08.2023 on the ground that he had not remitted 7.5% of the disputed duty as mandated by Section 35F of the Central Excise Act, 1944, as made applicable to service tax matters through Section 83 of the Finance Act, 1994.

He then filed WP(C) No. 32153 of 2023 before the Kerala High Court, contending he had not been given an opportunity of hearing and that the appellate authority should have returned the appeal for curing the defect rather than dismissing it outright, relying on an earlier single-judge ruling (W.P.(C) No. 705 of 2021) that had permitted deposit of the Section 35F amount even after rejection.

This is a pre-GST Service Tax dispute under the Finance Act, 1994; it does not involve GST law.

Issues Involved

  1. Whether the appellate authority was justified in dismissing the statutory appeal solely for non-payment of the mandatory pre-deposit under Section 35F of the Central Excise Act, 1944 (as applied via Section 83 of the Finance Act, 1994), without giving a further opportunity to cure the defect.

Petitioner's Arguments

  • Section 85 of the Finance Act, 1994, dealing with appeals to the Commissioner of Central Excise, did not itself insist on any pre-condition of remitting a percentage of the assessed amount along with the appeal.
  • He had not been given an adequate opportunity of hearing before the impugned rejection, and relying on a prior single-judge ruling permitting deposit of the Section 35F amount as a condition for entertaining a similar appeal, he sought a similar opportunity.

Respondent's Arguments

  • The order does not record any specific counter-submissions from the respondent-department beyond its participation in the hearing; the outcome turned on the petitioner's own concession that the appeal had indeed been dismissed for non-payment of the statutory pre-deposit.

Court Order / Findings

  • The Court noted that the appeal was a statutory appeal rejected only because the amount required under Section 35F had not been deposited, and held that one more opportunity should be granted to the petitioner to make that deposit so his appeal could be considered on merits.
  • It quashed the impugned order rejecting the appeal, and permitted the petitioner to deposit the amount required under Section 35F of the Central Excise Act, 1944, towards pre-deposit.
  • It directed that if the petitioner deposited the amount within fifteen days, the appellate authority would consider and decide the appeal afresh in accordance with law.

Important Clarification

This order does not decide the underlying service tax liability of Rs. 12,47,756 — it only restores the petitioner's opportunity to pay the mandatory pre-deposit so that his appeal can be heard on its merits. The dispute concerns the Finance Act, 1994 (Service Tax) regime that predates GST, and readers should not treat this as a GST ruling.

Sections Involved

  • Central Excise Act, 1944 – Section 35F (pre-deposit for hearing of appeal), as applied to service tax via Section 83 of the Finance Act, 1994
  • Finance Act, 1994 – Section 85 (appeals to the Commissioner of Central Excise)

Decision – In Favour of

Decided in the petitioner's favour on the procedural point — the rejection of his appeal was quashed and he was given a fresh fifteen-day window to make the mandatory pre-deposit so the appeal could be heard on merits; the tax liability itself remains to be decided by the appellate authority.

Case Details

High Court of Kerala at Ernakulam. WP(C) No. 32153 of 2023 (A.S. Aniyan Pillai v. The Commissioner, Office of the Commissioner (Appeals), Central Tax, Central Excise and Customs, Kochi and Another). Coram: Hon'ble Mr. Justice Dinesh Kumar Singh. Dated 04.10.2023.

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