• Service tax is applicable or not

Sir/madam,
My brother has resigned from his job of a resturent recently without serving notice period of two months. There for the resturant authority has issued a pay notice to my brother mentioning that accoring to appointment letter he has to serve 2 months notice period or else he has to pay two months salary to them. So they have mentioned one amount giving that excluding taxes, should be given within 30 days of receipt of that pay notice otherwise legal action will be taken against him. Today i have called them to know how i need to make payment. They informed me that we  need to give Demand draft. I just prepared to pay through DD but again I thought to confirm in favourable and payable at, so i just mail them and then they  said that whatever the amount given on the pay notice, other than that 15% service tax also we need to serve for the same. Now my question is whether service tax will be applicable to this case or not ? I would also like to know if some one take legal action like in this case, upto what extend one can be penalised ?( No intension to default, just for knowledge)
Asked in Business Law from Guwahati, Assam
1) what were terms of appointment letter? 

2) if appointment letter provided your brother has to give 2 months notice and he has left without serving notice period his employer would sue him to recover salary of 2 months 

3) in case any suit is filed by employer it would to recover 2 months salary with interest 

4) as far   as applicability of service tax is concerned consult a chartered accountant in this regard 
Ajay Sethi
Advocate, Mumbai
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employee cannot be forced to work without his consent 

but employee has to honour the terms of contract wherein he agreed to give 2 months notice if he left the organisation . 

if leaves without notice employee has to pay salary in lieu of notice period 
Ajay Sethi
Advocate, Mumbai
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The notice period is part of service conditions. The service conditions are governed by standing orders of the company or appointment letter. Notice pay in lieu of shortfall in notice period is ideally Basic + DA Employer encashes paid leave, disburses bonus, OT, Gratuity on Basic + DA. It does not include service tax.
Ashish Davessar
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Now my question is whether service tax will be applicable to this case or not ? I would also like to know if some one take legal action like in this case, upto what extend one can be penalised ?( No intension to default, just for knowledge)

No service tax is payable for buying the notice period, i.e., if you are intending to pay the notice period then the basic salary alone can be paid and not any taxes attached to it. 
If you dont pay the notice period amount then they may initiate money recovery suit against your brother in civil court.
T Kalaiselvan
Advocate, Vellore
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Can law force to work anyone without his or her willingness to do job if they have agrement .?
No, law cannot force however the alternate clause i.e., to compensate the loss due to sudden resignation by paying the amount in terms of employment offer letter shall have to be complied with.
T Kalaiselvan
Advocate, Vellore
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176 Consultations

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