Whether the authorities can serve any notice under sub-sec. if after the payment of service tax and interest is made and the said information is furnished to the authorities

PJ/Case Laws/2012-13/1128

Case:- C.C.E & S.T., LTU. BANGLORE VS ADECCO FLEXIONE WORKFORCE SOLUTIONS LTD.

Citation: - 2012 (26) S.T.R 3 (Kar)

Issue: Whether the authorities can serve any notice under sub-sec. if after the payment of service tax and interest is made and the said information is furnished to the authorities?

Brief fact: - The Assessee has paid both the service tax and interest for delayed payment before issue of show cause notice under the Act. Sub-sec. (3) of Section 73 of the Finance Act, 1994 categorically states, after the payment of service tax and interest is made and the said information is furnished to the authorities, then the authorities shall not serve any notice under sub-sec. (1) in respect of the amount so paid. Therefore, authorities have no authority to initiate proceedings for recovery of penalty under Sec. 76 of the Act. These Appeal are preferred by the assessee challenging the order passed by the Tribunal as well as the Appellate Commissioner who have held that the Assessee is not liable to pay any penalty under Section 76 of the Finance Act, 1994.

Reasoning of Judgment: The Authorities are paid salary to act in accordance with law and to initiate proceedings against defaulters who have not paid service tax and interest in spite of service of notice calling upon them to make payment and certainly not to harass and initiate proceedings against persons who are paying tax with interest for delayed payment. the authorities will change their attitude towards these tax payers, understanding the object with which this enactment is passed and also keep in mind the express provision as contained in sub-sec. (3) of Sec. 73. The Parliament has expressly stated that against persons who have paid tax with interest, no notice shall be served. If notices are issued contrary to the said Section, the person to be punished is the person who has issued notice and not the person to whom it is issued. The High Court take that, in ignorance of law, the authorities are indulging in the extravaganza and wasting their precious time and also the time of the Tribunal and this Court. It is high time that the authorities shall issue appropriate directions to see that such tax payers are not harassed. If such instances are noticed by this Court hereafter, certainly it will be a case for taking proper action against those law breakers. The High Court does not see any merit in the Appeal and appeal dismissed

Decision: - Appeal dismissed

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PJ/Case Laws/2012-13/1128

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