Commissioner of CGST And C. Ex. Vs Sai Consulting Engineering Pvt. Ltd. (Gujarat High Court)
Gujarat High Court has dismissed an appeal filed by the Commissioner of CGST and Central Excise, affirming that simultaneous penalties cannot be imposed under both Section 76 and Section 78 of the Finance Act, 1994, in relation to Service Tax. The court’s decision was based on its own binding precedent on the matter.
The department had challenged a judgment by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) dated June 13, 2017. The sole question of law raised for the High Court’s consideration was “Whether in the facts and circumstances of the case and law, the Hon’ble Tribunal has committed substantial error of law by quashing and setting aside the OIO dated 6/5/2011 holding that simultaneous penalty under section 76 and 78 of the Finance Act, 1994 cannot be imposed?”
The Gujarat High Court noted that this specific issue regarding the simultaneous imposition of penalties under Section 76 and Section 78 of the Finance Act, 1994, was not a new one and had already been settled by a judgment of a Division Bench of the same court.
The court referred to its earlier decision in the case of Raval Trading Company v. Commissioner of Service Tax (Tax Appeal No. 1534/2011, judgment dated January 7, 2016). The relevant observations from the Raval Trading Company judgment were reproduced and relied upon by the court in the present case.
