Order to Be Quashed as Penalty Imposed Under CGST Act for Exempted Services Under Service Tax Was Invalid | HC

Case Details: Pawan Kumar Upmanyu v. Union of India - [2025] 172 taxmann.com 560 (Patna)

Judiciary and Counsel Details

• P.B. Bajanthri & Sunil Dutta Mishra, JJ.
• Sanjay Kumar, Bijay Kumar Pandey, Tejendra Sinha, Advs. for the Petitioner.
• Dr K.N. Singh, Sr. Adv., Anshuman Singh, Sr. CGST & LX, Shivaditya Dhari Singh, Adv. for the Respondent.

Facts of the Case

The assessee, an educational institution, provided services under the Free and Essential Education Act, 2009. During the relevant period, the Finance Act 1994 was applicable, and services provided by eligible educational institutions were exempted. Subsequently, the Assistant Commissioner imposed a service tax penalty under section 78 of the CGST Act, along with additional penalties for the relevant financial year. The matter was raised before the Patna High Court, and the Court held that the matter was already covered by the decision of the coordinate Bench in the case of Kanak Automobiles Private Limited. The said decision was also subject matter before the Hon’ble Supreme Court in Special Leave Petition (Civil) Diary No. 54313/2024 decided on 03.01.2025.Having regard to the quantum of tax involved in the present case and Kanak Automobiles, in Kanak Automobiles, it was Rs. 86 Lakh, whereas in the present case, it was Rs. 6,33,879.

High Court Held

Therefore, the Court intended to dispose of the matter in the light of Kanak Automobile case read with the Hon’ble Supreme Court decision. Accordingly, the writ petition was allowed.