2015 (12) TMI 261 - AT - Service Tax

Demand of service tax - renting of immovable property service - Held that - Even though appellant can be faulted for non-payment of tax collected by them, yet when the legislature in its wisdom does not differentiate between the person who has collected the tax and did not pay it to the Govt. and the person who has not collected the tax at all, it would not be appropriate for us to read such a provision into the Section enacted by the Parliament. Therefore, we find that benefit of Section 80(2) is available to the appellant - there is no other issue to be considered and no facts or law is required to be gone into and therefore, the final decision need not be postponed to a later date. We find that the amount of Service Tax plus interest deposited in their entirety within six months from the date, the Finance Bill receiving assent of the President is in accordance with law - Decided in favour of assessee.

Summary

Issues:
Service Tax demand on renting of immovable property service from May 2009 to September 2009. Applicability of Section 80(2) regarding penalty for failure to pay Service Tax.

Analysis:
The case involved a demand for Service Tax on renting of immovable property service provided between May 2009 and September 2009. A show cause notice led to the confirmation of a tax demand of Rs. 40,31,478 along with interest, which the appellant paid. The crux of the issue revolved around the interpretation and application of Section 80(2) concerning the penalty for non-payment of Service Tax. The appellant contended that as per Section 80(2), if the Service Tax and interest are paid within six months from the date the Finance Bill, 2012 receives the President's assent, no penalty is imposable for failure to pay the tax by March 6, 2012.

The provision cited by the appellant stated that no penalty shall be imposed for failure to pay Service Tax by the specified date if the tax and interest are paid in full within the stipulated timeframe. The President's assent to the Finance Bill, 2012 was received on May 28, 2012. The appellant fulfilled the conditions by paying the entire tax amount and interest within the prescribed six-month period. Therefore, the appellant argued that Section 80(2) should be applicable in their case to avoid the penalty.

On the other hand, the respondent vehemently opposed the appellant's claim, arguing that the provision of Section 80(2) should not apply to the appellant. The respondent contended that since the appellant had collected the tax but failed to remit it to the government, they should not benefit from the provision. However, the Tribunal noted that Section 80(2) does not differentiate between assessees who collected but did not pay the tax and those who did not collect at all. The Tribunal emphasized that it is not their place to read such differentiation into the legislation enacted by the Parliament. Consequently, the Tribunal held that the benefit of Section 80(2) was available to the appellant in this case.

Ultimately, the Tribunal found that since the appellant had deposited the Service Tax and interest in full within the specified timeframe after the Finance Bill received the President's assent, they had complied with the law. As there were no other issues to consider, the Tribunal allowed the appeal, ruling in favor of the appellant and pronouncing the operative portion of the order in open court.