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VINAY KUMAR SHRAFF

FCA, AICWA, ACS, DISA, Adv. Dip. in Mgt. Acctng. (CIMA- London)
52 Weston Street 5th Floor
KOLKATA – 700 012
PHONE: 22259194(O), 98300 61359(M)
e-mail: vshraff@hotmail.com

The Assistant Commissioner of Service Tax, July 28, 2006


Division - I, Service Tax Committee,
Kolkata – 700 073.
Sir,

Re: Show cause cum demand notice no. C.NO.V(13) 341/R.K./Sen/ST/D-


I/Kol/05-06/702 dated 20/12/2005

Further to reply submitted by our client in relation to show cause cum demand notice no.
C.NO.V(13) 341/R.K./Sen/ST/D-I/Kol/05-06/702 dated 20/12/2005 wherein you have
demanded interest of Rs. 331/- for late deposit of service tax for the April, 04 to June, 04
and sought to impose penalty us/s 76 of the Finance Act, 1994 for late deposit of tax and
also sought to impose penalty u/s 77 of the Finance Act, 1994 for late submission of
return for the period April, 04 to September, 04.
In this regard I would like to bring to your kind attention that there was no malafide
intention on our part to evade payment of tax as it was deposited by us voultarily.
It was decided in the case of HINDUSTAN STEEL LTD. Versus STATE OF ORISSA –
1978 (2) E.L.T. J159 (S.C.) that an order imposing penalty for failure to carry out a
statutory obligation is the result of a quasi-criminal proceeding, and penalty will not
ordinarily be imposed unless the party obliged either acted deliberately in defiance of law
or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its
obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether
penalty should be imposed for failure to perform a statutory obligation is a matter of
discretion of the authority to be exercised judicially and on a consideration of all the
relevant circumstances. Even if a minimum penalty is prescribed, the authority competent
to impose the penalty will be justified in refusing to impose penalty, when there is a
technical or venial breach of the provisions of the Act or where the breach flows from a
bona fide belief that the offender is not liable to act in the manner prescribed by the
statute.
Further it was decided in the case of CATALYST CAPITAL SERVICES PVT. LTD.
Versus COMMISSIONER OF C. EX., MUMBAI-IV - that as assessees had already
deposited service tax and there was no mala fide intention in making delayed payment ,
the penalty was waived.
VINAY KUMAR SHRAFF
FCA, AICWA, ACS, DISA, Adv. Dip. in Mgt. Acctng. (CIMA- London)
52 Weston Street 5th Floor
KOLKATA – 700 012
PHONE: 22259194(O), 98300 61359(M)
e-mail: vshraff@hotmail.com

Hence I request you to kindly drop the penalty proceedings against M/s R.S. Kyal & Co.
for delay in payment of tax as well as for late submission of return as service tax with
interest has already been paid by them.
A copy of the judgements relied upon is enclosed herewith for your reference.

Thanking you,

Yours faithfully,

Vinay Kumar Shraff