M/S A G Systems Through Its Proprietor Apurva Girish Kulkarni vs. The Commissioner Central GST And Central Excise And Another
Held
The Court held that for an assessee to invoke Section 80 of the Act, which provides for waiver of penalty upon proof of reasonable cause, they must demonstrate reasonable grounds suggesting that the amount received as a subcontractor was not liable for service tax. Mere assumption is insufficient. The Court found that the petitioner's belief was merely an assumption without sufficient cause, and it was not a case where they were guided by an expert opinion, a shaky position of law, or a dictum of the Courts. Therefore, the petitioner's assumption could not be termed as a reasonable cause to invoke Section 80. The Tribunal's observation that the situation was not one where Section 80 could be invoked was upheld. Consequently, the Court found no error in the Tribunal's judgment and no interference was called for.
Facts
The petitioner, M/s A G Systems, through its proprietor Apurva Girish Kulkarni, filed a writ petition challenging the judgment of the Tribunal. The Tribunal had confirmed the order passed by lower authorities concerning the imposition of penalty. The petitioner's case was that they were entitled to the benefit of Section 80 of the Act as it stood then, arguing a bona fide belief that amounts received as a subcontractor were not liable for tax. Upon being informed of the liability, the tax was deposited. The respondents supported the Tribunal's order.
Key Issues
1. Whether the petitioner is entitled to the benefit of Section 80 of the Act, which provides that no penalty shall be imposed if the assessee proves a reasonable cause for the failure, considering the petitioner's bona fide belief that amounts received as a subcontractor were not liable for tax? Petitioner's arguments: The petitioner contended that they acted under a bona fide belief that amounts received as a subcontractor were not taxable. They argued that this belief led to the non-disclosure, but upon clarification, they accepted the liability and deposited the tax, demonstrating their bona fides. They sought an opportunity to represent their case before the Tribunal. Revenue's arguments: The learned counsel for the respondents supported the order of the Tribunal.
Sections Cited
Section 80
AI-generated summary — verify with the full judgment below
( 1 ) 906 wp 3567.19 IN THE HIGH COURT OF JUDICATURE AT BOMBAY BENCH AT AURANGABAD 906 WRIT PETITION NO.3567 OF 2019 M/S A G SYSTEMS THROUGH ITS PROPRIETOR APURVA GIRISH KULKARNI VERSUS THE COMMISSIONER CENTRAL GST AND CENTRAL EXCISE AND ANOTHER ... Advocate for Petitioner : Mr. Kolte Abhay Advocate for Respondents : Mr. Ladda Dwarkadas S for R/1 & 2. ... CORAM : S.V. GANGAPURWALA & MANGESH S. PATIL, JJ. DATE : 20.06.2019 P.C. : The petitioner assails the judgment of the Tribunal confirming the order passed by the lower authorities.
Mr. Kolte the learned advocate for the petitioner submits that the present appeal is limited to the extent of penalty imposed upon the petitioner. The petitioner is entitled to the benefit of Section 80 as it stood then. Unfortunately, the case of the petitioner was not properly putforth before the authorities and as such the authorities did not have the advantage to consider the case of the petitioner in its correct perspective. The learned advocate submits that the petitioner was under a bona fide belief that the amount received by the petitioner as a Subcontractor would not be liable for tax. It
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