CA not guilty of misusing of service tax collected from client; further inquiry ordered

Facts:

a) A CA used to file returns of his client and at the end of every month, he used to collect the amount of service tax on behalf of the client for depositing it in the service tax account. 

b) He used to give photocopies of the Challans deposited in the Bank. On verification of service tax payments to bank it was found that CA was not depositing the same of service tax as collected from client.

c) Client filed a complaint with the ICAI council against such CA. The Council held that the CA was guilty of 'professional misconduct'.

The High Court held as under:

1) The complaint did not mention the relative amounts, the challans, the amounts allegedly collected as due, and the amounts paid. However, the relative or corresponding demands from the Service Tax authorities or the assessment orders, or even the service tax returns, were not on the record. These would have substantiated to a large measure the client's allegation. Likewise, there was no material to suggest that the amounts were deposited in some other concern's account. Quite possibly the respondent has been charge criminally for an offence.However, that ipso facto did not transform into proof of such criminal misconduct;

the prosecution or the complainant would have to establish his guilt. 

2) The matter requires to be gone into afresh by the Council. Having regard to the gravity of the allegations, it would be appropriate that the Council should consider all the relevant materials, including the documents and the deposition of the complainant before preparing a fresh report.