Tax Penalty Overturned: Late Payment Resolved Before Notice, No Revenue Loss Proves Taxpayer's Compliance HC upheld CESTAT's order quashing a penalty against a proprietary concern for service tax delay. Despite late payment during 2000-2005, the taxpayer ...
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Tax Penalty Overturned: Late Payment Resolved Before Notice, No Revenue Loss Proves Taxpayer's Compliance
HC upheld CESTAT's order quashing a penalty against a proprietary concern for service tax delay. Despite late payment during 2000-2005, the taxpayer settled the full tax and interest before the show cause notice. The court found no revenue loss and confirmed the Tribunal's decision to set aside the penalty, dismissing the Revenue's appeal.
The Kerala High Court, in an appeal by the Revenue against the Customs, Excise and Service Tax Appellate Tribunal's order setting aside a penalty, upheld the Tribunal's decision. The respondent, a proprietary concern, had delayed payment of service tax for 2000-2005 but ultimately paid the tax with interest on 8-2-2015. The Tribunal found that since the service tax liability with interest was settled before the show cause notice dated 29-9-2005, "the penalty proceedings were not in order." The Court agreed, noting "there was no loss to the Revenue" and that the Tribunal "acted well within its jurisdiction." Consequently, the appeal was dismissed.
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