Payment of ST against a wrong assessee code - No Remedy? - There is remedy says Commissioner (A)
IN , we raised this question. We are informed that a Commissioner (Appeals) has held that there IS a remedy.
The assessee, Prashant Deshmukh had two PAN numbers one as Prashant Deshmukh (individual) and the other as Prashant Deshmukh & Associates (as a proprietor). He also obtained two Service Tax registrations with the above two PANs. Later he surrendered the second PAN, but due to a mistake paid Service Tax under the first PAN based Service Tax Registration Number. And he was stuck with a demand of Rs. 48.5 lakhs of Service Tax with equal penalty and consequential interest.
The Commissioner (A) observed, "At the outset, it needs to be clarified that the individual (natural person) and his sole proprietorship firm do not have separate identities in the eyes of law. Thus, even if two PAN of Income Tax have been obtained in the names of the individual (Prashant Deshmukh) and the proprietorship firm (M/s. Prashant Deshmukh & associates), the onus of compliance with various laws, including service tax, remains only once and on the sole legal entity Shri Prashant Deshmukh. The Appellant had obtained two Service Tax Registration numbers, based on his two PANs, but in the same name (viz. M/s. Prashant Deshmukh & Associates) and by declaring the same address… Obviously, service tax cannot be recovered from the same legal entity twice on the same service supplied by it, even if the said entity has erroneously obtained two Service Tax Registration Numbers."
Though the Commissioner (A) has judiciously held that Service Tax is not payable twice by the same entity for the same service, he has upheld the penalty under Sections 76 and 77. He has also confirmed the demand of interest.
We understand that strangely this controversial order has been accepted by the Department and they are not going to CESTAT with this issue.