2016 (2) TMI 172 - GUJARAT HIGH COURT

Levy of penalty u/s 78 - delayed payment of service tax due to financial hardship - Extended period of limitation - Held that:- The explanation offered by the assessee was not accepted. It was the case of the assessee that unaware of the tax liability, the service tax was not deposited with the department. Had this been the case, the assessee would have surely pleaded that such service tax was never collected from the service recipient. The defence that due to financial hardship such service tax was not paid would firstly destroy the assessee’s case of ignorance of service tax liability. - Levy of penalty confirmed.

Simultaneous penalties under Sections 76 and 78 - Held that:- we answer the additional question in favour of the appellantassessee and delete the penalty under Section 76 of the Finance Act, 1994, while upholding the penalty imposed under Section 78 and other penalties. - Decided in favor of assessee.