2019 (2) TMI 682

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....s found that the service tax paid by them was not correct and the turnover shown in the ST-3 returns did not match the balance sheet figures. It was noticed during audit that the income shown in the income tax returns and as per the P&L accounts and balance sheet was much higher than what was shown in the ST-3 returns. Ld. Counsel submits that during the period under consideration, service tax was payable only on the actual receipt and not on accrual basis, whereas the income tax returns and balance sheets were prepared on accrual basis. Therefore, there will always be a difference between the two. Further, he submits that the proprietary firm is run by a retired Havaldar of CISF who is not well educated or conversant with the provisions of....

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....f the provisions of the Finance Act 1994 and the rules made there under. Ld. Counsel prays that these penalties may be set aside by invoking the provisions of Section 80, for the following reasons: (a) The assessee was not very well educated or familiar with the provisions of the service tax and hence made mistakes. (b) At any rate, they have not received the full amounts indicated in their income tax returns and P&L accounts and during the relevant period, they were legally required to discharge the service tax liability only on receipt of the amounts. (c) Notwithstanding the above legal position, when the demand was raised, they had paid full service tax before issue of show cause notice and the interest during the process of adj....