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2023 (8) TMI 58 - HC - Service TaxSVLDRS - Levy of interest for part payment - Seeking to review the case in terms of section 110 of the Finance Act 2013 - benefit of Service Tax Voluntary Compliance Encouragement Scheme availed - recovery of interest for the entire tax liability of Rs. 57,89,270/-, whereas the belated payment was only 13,89,270/- - contention of the respondents is that once the declarant violated the conditions of the scheme he is not entitled to the benefits of the scheme - HELD THAT:- Section 110 states “fails to pay tax dues, either fully or in part, such dues along interest shall be recovered”. The respondents interpret it “fully tax liability”. This Court is of the considered opinion that on the comprehensive reading of the section would clearly indicate the phrase “such dues” would definitely mean the unpaid portion only. Since only the unpaid portion alone can be considered as “dues”. The respondents are adding words which is not found in the section. If the interpretation of the respondents is taken, then the same would attract the principle of “Casus Omissus”. Therefore, the section states interest in leviable for the unpaid portion alone. Moreover in tax laws if two interpretations are possible then the one which is advantageous to the assessee ought to be applied as held by the Hon’ble Three Judges Bench of Supreme Court vide its judgment dated 27.05.1997 in the case of Commissioner of Income Tax Bombay etc. Vs. Podar Cement Pvt. Ltd. etc. [1997 (5) TMI 2 - SUPREME COURT] held that Assuming that there are two possible interpretations on Section 22 of the Act, which is akin to a charging Section, it is well settled, that the one which is favourable to the assessee has to be preferred. Even on that principle the view taken by the High Courts of Patna, Punjab and Haryana, etc. has to be preferred rather than the contrary view taken by the High Courts of Delhi and Andhra Pradesh. In the present case, even if two interpretations are possible then the one which is favourable to the assessee has to be preferred. Therefore, on this ground also the petitioner is entitled to relief. Generally, the respondents levy interest for the unpaid portion of the tax liability. Even as per tax laws, when the portion of the tax liability is paid the respondents cannot levy interest for the entire tax liability. If the respondents are allowed to levy interest for the entire tax liability, when the portion of the tax is paid, then the same is without any authority of law - In the present case, the petitioner has paid 90% of the tax liability, but failed to pay the balance amount, then the petitioner is liable to pay interest for the balance amount alone. This Court is of the considered opinion that the interest cannot be levied for the entire amount of Rs. 57,89,270/-. This impugned order, dated 23.08.2022 is hereby quashed. Consequently, the respondents shall recalculate the interest portion for the amount of Rs. 13,89,270/- and recover the same. Once the petitioner has paid the interest for the balance amount of Rs. 13,89,270/-, the respondents shall release the attachment of bank account - Petition allowed.
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