9911796707
TMI Blog2014 (5) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... . Brief facts are as under:- 2.1 Petitioner No.1 is a partnership firm engaged in the business of construction. Petitioner No.2 is one of its partners. On 8.3.2013 preventive officers of the Service Tax Department conducted inquiry at the premises of the petitioners regarding the petitioners' unpaid service tax dues. Statements of the representatives of the firm were recorded. Documents and registers were seized. According to the petitioners various post dated cheques were taken from the petitioners under duress. Against such post dated cheques during the period between 9.3.2013 to 15.4.2013, the petitioners deposited total sum of Rs.35.51 lakhs with the department. On 14.7.2013 the petitioners deposited further amount with the department so that inclusive of the previous deposit of Rs.35.51 lakhs, the total deposit with the department made by the petitioners came to Rs.47,79,770/-. This was towards the petitioners' unpaid service tax liability upto 31.3.2013 as per the calculations of the department. 3. Under the Finance Act, 2013, the legislature introduced the said Scheme of 2013 under Chapter VI of the Act. Under certain circumstances a person could make a declaration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 19th of 20th of September, 2013 at 1100 hrs at the above mentioned address. In case you do not turn up or no correspondence is received from you in writing till the above mentioned dates, it will be presumed that you do not have a say in the matter and the decision will be taken ex-parte on the available records with this office." 5. The petitioners replied to such show cause notice under communication dated 21.9.2013 and contended that amount of Rs.31.51 lakhs was deposited after 8.3.2013 i.e. after the cut-off date on 1.3.2013. Such amount, therefore, would also qualify under the Scheme of 2013. 6. The designated authority, however, by his impugned order dated 31.12.2013 acknowledged the declaration of the petitioners only to the extent of tax dues to the tune of Rs.10,24,656/-. This was an amount we may recall deposited by the petitioners after 10.5.2013. In the impugned order the designated authority has not assigned any reason. However, apparently he stuck to his position indicated in the show cause notice and bifurcated the declaration of the petitioners in two parts concerning tax dues which were deposited after 10.5.2013; he accepted the declaration. Regarding the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dues" means the service tax due or payable under the Chapter or any other amount due or payable under section 73A thereof, for the period beginning from the 1st day of October, 2007 and ending on the 31st day of December, 2012 including a cess leviable thereon under any other Act for the time being in force, but not paid as on the 1st day of March, 2013." 11. Section 106 of the Finance Act, 2013 pertains to making of a declaration of tax dues and circumstances under which such declarations shall be valid, which section reads as under:- "106. Person who may make declaration of tax dues.-(1) Any person may declare his tax dues in respect of which no notice or an order of determination under section 72 or section 73 or section 73A of the Chapter has been issued or made before the 1st day of March, 2013: Provided that any person who has furnished return under section 70 of the Chapter and disclosed his true liability, but has not paid the disclosed amount of service tax or any part thereof, shall not be eligible to make declaration for the period covered by the said return: Provided further that where a notice or an order of determination has been issued to a person in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly, interest for delay in payment thereof, shall also be payable under the Chapter. (6) The declarant shall furnish to the designated authority details of payment made from time to time under this Scheme along with a copy of acknowledgment issued to him under sub-section(2). (7) On furnishing the details of full payment of declared tax dues and the interest, if any, payable under the proviso to sub-section(4), the designated authority shall issue an acknowledgment of discharge of such dues to the declarant in such form and in such manner as may be prescribed." 13. Section 108 pertains to immunity from penalty, interest and other proceedings and reads as under:- "108. Immunity from penalty, interest and other proceedings.- (1) Notwithstanding anything contained in any provision of the Chapter, the declarant, upon payment of the tax dues declared by him under sub-section(1) of section 107 and the interest payable under the proviso to sub-section(4) thereof, shall get immunity from penalty, interest or any other proceeding under the Chapter. (2) Subject to the provisions of section 111, a declaration made under sub-section (1) of section 107 shall become conclusive upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the Scheme. In our opinion, the contention ignores the statutory provisions contained in the Scheme of 2013. As we have noticed, the declaration can be made in terms of section 106 of tax dues. The term "tax dues" is defined in section 105(1) (e). If we accept the stand of the department that any tax which is deposited before 10.5.2013 cannot form part of a declaration, the same would substantially mutilate the definition of term "tax dues' contained in section 105(1)(e). If the intention of the legislature was to exclude any tax deposited before the framing of the scheme, the same could have been provided in plain language. On the contrary, the legislature excluded from the purview of declaration only those taxes which were already paid by 1.3.2013. The period between 1.3.2013 and 10.5.2013 would, by necessary application of the provision of the scheme, be covered for declaration under the Scheme itself. In our understanding, for a valid declaration two of the essential conditions were that the proceedings for either declaration or recovery of the tax dues should not be pending on 1.3.2013 and secondly that the tax should not have been deposited before the said date. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd was confirmed, that the petitioners' tax liability would have been crystallized. In the present case, till the Scheme was framed the amount thus remained with the department by way of a deposit. Once the scheme was framed, the petitioners made a declaration and even included such sum of Rs.35.51 lakhs by way of a declaration of their tax dues. Thus the admission on the part of the petitioners that the service tax was short-paid, came only by way of declaration under the Scheme. The clarification thus even for this reason would not cover the situation on hand. 21. In the result, the impugned communication dated 31.12.2013 annexed at Annexure-K to the petition is quashed to the extent the designated authority failed to cover the additional sum of Rs.35.51 lakhs against the item "tax dues" declared. The said authority shall, therefore, issue a fresh acknowledgment or amend the acknowledgment forwarded to the petitioners under communication dated 31.12.2013 so as to include the said additional sum of Rs.31.51 lakhs as tax dues declared in addition to Rs.10,24,656/- for which such acknowledgment has already been issued. Petition is allowed. Rule is made absolute to the above ext ..... X X X X Extracts X X X X X X X X Extracts X X X X
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