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2006 (3) TMI 36 - AT - Service TaxService Tax Chartered Accountant Service Penalty not imposable on respondents as they paid the service tax and interest immediately on coming to know Gujarat High Court s judgment upholding the levy
Issues:
Appeal against Order-in-Appeal dated 29.7.2004 setting aside penalties imposed on three respondents for non-payment of Service Tax and Interest. Analysis: The Department appealed against the Order-in-Appeal dated 29.7.2004, which set aside penalties imposed on three respondents for non-payment of Service Tax and Interest. The appellate authority noted that the respondents, who were Chartered Accountants, paid the Service Tax and Interest upon learning of the Honourable Gujarat High Court's decision against them. Despite the issue of Service Tax on services provided by Chartered Accountants being disputed and challenged in various High Courts, the respondents promptly settled the dues upon receiving the judgment from the Gujarat High Court. The High Courts had dismissed the Writ Petitions but allowed Chartered Accountants to avoid penalties by paying within a specified time. Given these circumstances, the appellate authority found no reason to interfere with the Order and dismissed all three appeals collectively. This judgment highlights the importance of timely compliance with tax obligations, especially in cases where legal disputes are ongoing. The proactive approach taken by the respondents in paying the Service Tax and Interest upon receiving the judgment from the Gujarat High Court played a crucial role in the appellate authority's decision to uphold the Order-in-Appeal setting aside the penalties. The judgment also underscores the significance of vigilance and prompt action in addressing tax liabilities to avoid potential penal consequences. The decision serves as a reminder for taxpayers, including professionals like Chartered Accountants, to stay informed about legal developments and act swiftly to fulfill their tax obligations to mitigate risks of penalties and legal repercussions.
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