Facts of the Case

Kaviyoor Service Co-operative Bank Ltd. challenged an appellate order dated 23.08.2023 dismissing its appeal against an Order-in-Original No.04/2021-22/ST-DC dated 28.10.2021, passed by the Deputy Commissioner, Central GST and Central Excise, Pathanamthitta Division, in a Service Tax matter governed by the Finance Act, 1994.

The Appellate Authority had dismissed the appeal on the ground that the mandatory pre-deposit under Section 35F of the Central Excise Act, 1944 (as applicable to Service Tax appeals) had not been complied with, holding the appeal not maintainable regardless of its merits.

Before the High Court, the petitioner's counsel offered to comply with the mandatory pre-deposit requirement — 7.5% of the demand — within ten days. The Court accepted this and disposed of the writ petition on that basis, without examining the underlying Service Tax demand.

Issues Involved

  1. Whether the Appellate Authority was justified in dismissing the appeal solely for non-compliance with the mandatory pre-deposit requirement under Section 35F, without going into the merits.
  2. Whether the petitioner should be given a further opportunity to make the pre-deposit and have the appeal heard on merits.

Petitioner's Arguments

  • The petitioner was willing to comply with the mandatory pre-deposit requirement — depositing 7.5% of the demand — within ten days, so that the appeal could be heard and decided on merits.

Respondent's Arguments

  • The specific opposing arguments of the Department are not elaborated beyond the fact that the Appellate Authority's dismissal was founded strictly on non-compliance with Section 35F.

Court Order / Findings

  • The Court noted that the Appellate Authority correctly held that non-compliance with the mandatory pre-deposit under Section 35F rendered the appeal not maintainable, regardless of merits.
  • On the petitioner's undertaking to deposit 7.5% of the demand within ten days, the Court directed that if such deposit was made, the appeal would be heard and decided on merits, with any delay in filing to be considered for condonation in accordance with law.
  • The writ petition was finally disposed of on this basis.

Important Clarification

This is a Service Tax (Finance Act, 1994) matter, not a GST case — the mandatory pre-deposit requirement discussed here is the one under Section 35F of the Central Excise Act as applied to Service Tax appeals of the pre-GST regime. It reaffirms that pre-deposit compliance is a jurisdictional precondition for an appeal to be heard on merits, whether under the old Service Tax regime or, by analogy, under GST appeal provisions.

Sections Involved

  • Finance Act, 1994 — levy of Service Tax (pre-GST regime)
  • Central Excise Act, 1944 — Section 35F (mandatory pre-deposit for appeals)

Decision – In Favour of

Decided in the petitioner's favour to a limited extent — it was given a further opportunity to make the mandatory pre-deposit and have its appeal heard on merits; the underlying Service Tax demand was not examined.

Case Details

  • Court: High Court of Kerala at Ernakulam
  • Case No.: WP(C) No.33391 of 2023
  • Coram: Hon'ble Mr. Justice Dinesh Kumar Singh
  • Date of Order: 12.10.2023

Link to Download the Order

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