Commissioner of Tax, GST Delhi East Versus M/s. Indian Railway Finance Corporation
Service Tax
2017 (11) TMI 1335 – DELHI HIGH COURT – [2018] 1 GSTL (VAT) 17 (Del)
DELHI HIGH COURT – HC
Dated:- 10-11-2017
SERTA 8/2017
Service Tax
MR. SANJIV KHANNA & MS. PRATHIBA M. SINGH JJ.
Appellant Through: Mr. Amit Bansal, Sr. Standing Counsel with Mr. Akhil Kulshrestha, Advocate.
Respondent Through: None
SANJIV KHANNA, J. (ORAL):
Having heard counsel for the appellant, we are not inclined to interfere with the impugned order, which records and affirms on the bona fide conduct of the respondent-assessee, M/s. Indian Railway Finance Corporation.
2. The respondent-Corporation, a Government of India Corporation, was established
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on 65 of Chapter-V of the Finance Act, 1994.
5. The stand taken by the respondent-Corporation was that as per their understanding, they were not liable to pay service tax on the aforesaid fee etc. payable to non-resident financial institutions. No service was rendered by these non-resident financial institutions in India.
6. Nevertheless, to avoid any dispute or controversy, the respondent Corporation had discharged the service tax liability as raised by the appellant amounting to Rs. 1,21,92,787/-. They had also paid interest of Rs. 23,96,774/- on the said amount.
7. The question raised in the present case relates to imposition of penalty under Section 78 of the Finance Act. The order-in-original itself records that the service tax on r
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t to evade payment of service tax, was satisfied. It is stated that Section 78 is pari materia with the proviso to Section 73, which provides for extended period for recovery. Payments made by the respondent Corporation were for the extended period.
9. The said argument proceeds on the assumption that since the respondent-Corporation had paid the service tax for the extended period without any contest, it should be held that the said Corporation has accepted that they had suppressed facts or contravened provisions of the Act/Rules with the intent to evade payment of service tax. The argument should be rejected. Goodness and precocious conduct of the respondent Corporation in making payment has to be appreciated and not condemned. The respo
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