In Brief
The appellant, Shoeline, was served a show cause notice for non-payment of service tax on commission paid to overseas agents (July 2004–March 2006), which the Department assessed under 'Business Auxiliary Service'. The appellant's objections were rejected and the demand confirmed in 2008. However, the appellant did not challenge this order promptly, paid the tax in instalments over years, and filed a writ petition only in 2012—four years later. The High Court dismissed the petition as barred by delay and laches. The Supreme Court upheld the dismissal but held that although the appellant remains bound by the substantive tax demand (no refund), it should not be required to pay penalty and interest on a tax that was not payable in law (service tax liability arose only after April 18, 2006, when Section 66A was inserted). The appeal was partly allowed by waiving interest and penalty.
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