HC declines relief to Microsoft over service tax penalty

The Delhi High Court today refused to provide relief to Microsoft India on a duty demand of Rs 260 crore by the government for alleged violation of service tax norms.

A division bench comprising Justice A K Sirki and Justice Valmiki J Mehta dismissed a petition by Microsoft India challenging the government's demand to pay Rs 260 crore, including service tax, penalty and interest.

The court observed that the IT major had aleready challenged the order to pay the amount before the Customs Excise Service Tax Appellate Tribunal (CESTAT). And as the matter was still pending before the sectoral tribunal, there was no ground to challenge before the court, the bench said.

CESTAT had directed Microsoft India to deposit Rs 70 crore for hearing its appeal, as per norms. Microsoft India, however, challenged this before the court.

The high court declined to stay the tribunal's direction but asked the government to file its reply in this matter and directed that it be listed on September 22.

The government was represented by the Addditional Solicitor General A S Chandioke and Advocate Mukesh Anand.