The Delhi High Court on Friday dismissed a petition by software giant Microsoft India challenging an order by a tribunal that directed the company to deposit Rs. 70 crore in a case of alleged service tax evasion.
A division bench of Justice A.K. Sikri and Justice Siddharth Mirdul ordered Microsoft India to make the deposit with the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) within four weeks.
“In the exercise of our jurisdiction we feel that it is not a fit case where one should interfere with the said order (of CESTAT). This writ petition is accordingly dismissed,” the court said in its order.
“However, we grant four weeks time to the petitioner (Microsoft India) to deposit the amount as directed by the tribunal for compliance,” it added.
The service tax department had issued a notice to Microsoft India in September 2008 demanding Rs. 400 crore, which consisted of a duty demand of Rs. 255 crore and interest on the amount for three years, over an alleged tax evasion for services provided by the company to its sister concern in Singapore.
This demand was challenged by Microsoft India at CESTAT, which in July 31, 2009 directed the IT firm to make a pre-deposit of Rs. 70 crore and the balance would be settled after disposal of the case.