Facts:
The assessee was engaged in providing commercial coaching and training service, liable to service tax under the Finance Act 1994. While assessee had obtained registration, no service tax was paid for the period September 9, 2004 to March 31, 2008. Returns were filed stating that there was no service tax liability.
During the course of investigations, assessee offered to pay service tax dues and filed revised returns on March 2, 2009. Meanwhile, show cause notice was issued on June 23, 2009, which culminated in order dated January 6, 2012 and besides tax liability, penalties were also imposed.
Assessee’s appeal to CESTAT was rejected, who declined to interfere with findings and penalties imposed by Commissioner (Appeals). Hence, it approached the HC.
Held:
HC dismisses assessee’s challenge to imposition of simultaneous penalties u/s 76 & 78 of Finance Act, 1994 for non-payment of services tax dues against commercial training and coaching services. It Rejects assessee’s reliance on Gujarat HC ruling in Raval Trading Company to urge that CESTAT erred in upholding penalties simultaneously.
further observes that service tax amount for period September 2004 to March 2008 was offered for payment subsequent to initiation of search proceedings.
HC opined that, such case of foreknowledge, itself is an important factor that ought to have been and was taken into account by the lower revenue authorities which lead to the imposition of recovery of dues assessed as well as imposition of penalty u/s 78.
HC stated that depositing the amount due before issuance of notice per se, does not absolve the assessee of its responsibility to file the returns, since the option of imposing other penalty u/s 76 was exercised. Moreover, referring the case of Bajaj Travels Ltd, HC finds assessee’s contention regarding retrospective effect of amendment to Section 78 unsubstantiated .
Citation: [TS-339-HC-2018(DEL)-ST]