AMIT BAJAJ ADVOCATE

Delhi High court has held in an important following case that if the assessee makes a bonafide mistake in  calculation of service tax then no penalty u/s 76 or 78 can be levied, as it constitutes a reasonable cause for the faliure to deposit due tax.

In this case the defence was that it was paying service tax  as per its bona fide understanding that the service tax was to be paid on the commission retained by the appellant. It was pleaded that the matter of calculation was not clear to it. Therefore, it had been filing its service tax returns on the basis of the commission retained by it and the correct method of computing the service tax was pointed out by the visiting team of the department. Therefore, the allegation of suppression, mis-statement were wrongly attributed to it.