2004 (12) TMI 3

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....rtered Accountants. The Hon'ble High Court granted interim relief to the respondents and stayed recovery of the tax from them. However, ultimately the writ petition challenging the validity of the service tax on Chartered Accountants was decided by the Hon'ble High Court with directions to the respondents to pay the tax on or before 28-02-2001. It was also directed in the said judgment that no penal action would be taken against the fraternity of Chartered Accountants, if they pay the arrears of the tax by 28-02-2001. There is no dispute that the tax arrears were paid by the respondents before the said date. 4. In view of the above background, the original adjudicating authority did not impose any penalty upon the respondents. However....

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.... the petitioner association may not be made to suffer any adverse consequence on account of delay in payment of service tax if the payment was made within two months i.e. 28-02-2001. As per the settled legal position, the principle of restitution would apply, if the court had not given any direction while dismissing the petitions. As stated above, it had intended to protect the members of the petitioner association against adverse consequences arising from delay in payment of service tax on account of pending petitions with interim relief in favour of petitioners. In our view, the provisions of section 75 will have to be read in light of the aforesaid interim relief and the final direction and, therefore, it cannot be said that even if the ....

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....thheld and the extent of the delay in paying the tax on the due date. Essentially, it is compensatory and different from penalty - which is penal in character." 8. In view of the above, the Ld. JDR has submitted that the interest and penalty are independent of each other and in the absence of any specific directions by the Hon'ble High Court; the interest is required to be charged. 9. I have considered the submissions made by the Ld. JDR and have gone through the impugned order of the Commissioner (Appeals). In my views, the appellate authority has rightly referred to para 7 of the High Court's order passed on the miscellaneous application seeking clarification. The observations made by the High Court that it had intended to protect t....