Penalty for delayed nil service tax return was unwarranted for a new assessee unfamiliar with filing requirements.

Penalty for delayed filing of a quarterly service tax return was held unwarranted where the assessee was new, the return was nil, and no business activity was being carried on. The Tribunal noted that service tax was a newly introduced levy and that the assessee was not conversant with the filing requirements. On the totality of the facts, the circumstances did not justify penal action under the provision invoked, and the penalty order was set aside.

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Issues: Whether penalty was justified for delayed filing of the quarterly service tax return by a new assessee with a nil return.

Analysis: The appellant had filed the first quarterly return late, but the return was stated to be nil and the appellant was not carrying on business. The Tribunal noted that service tax was a newly introduced levy and that the appellant, being a new assessee, was not conversant with the filing requirements. On the totality of the facts, the circumstances did not warrant penal action under the provision invoked.

Conclusion: No case for imposition of penalty was made out and the penalty order was set aside.

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