ACT OF NON PAYMENT OF SERVICE TAX AFTER ITS COLLECTION CAN’T BECLAIMED TO BE DONE UNDER A BONA FIDE BELIEF
Act of non-payment of service tax after its collection can’t beclaimed to be done under a bona fide belief
In the recently concluded case of Indsur Global Ltd. Versus Additional Commissioner of service Tax, Vadodara (2015) (Gujarat) tribunal held that act of non-payment of service tax after its collection can’t be claimed to be done under a bona fide belief.
In the instant case, assesse had collected service tax from the service recipient but did not deposit same with Government and showed Nil service tax liability in periodical return. Assessee paid service tax only after issuance of summons by department. Department levied penalties under sections 76, 77 and 78. Assessee claimed that it was a case of bona fide error and penalties must be waived under section 80.
The honorable Court held that it is primary duty of assessee to establish ‘reasonable cause’ for failure, which is a question of fact. No penalty would be imposed only if he proves that there was reasonable cause of such failure. In the instant case, the assessee could not show reasonable cause to bring out as to what prevented the assessee from making the payment of service tax when the same was actually recovered from the service recipient and Tax appeal is dismissed. Hence, the assessee liable to pay penalties under section 76, 77 and 78.
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