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V.R. Mohanraj, Proprietor of M/s. VMBK Promoters Versus The Commissioner of Service Tax –I, The Joint Commissioner of Service Tax

2016 (4) TMI 846 - MADRAS HIGH COURT

Imposition of penalty - Services provided as marketing agent - non-payment of Service Tax for the commission payments received - Held that:- it is clear that the 2nd respondent has given an opportunity of personal hearing to the petitioner and he was also represented by his counsel before the 2nd respondent. The petitioner also filed his reply before the 2nd respondent, which was also considered by the 2nd respondent. Therefore, from the above, it is clear that there is no violation of principle .....

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order being an appealable order, the Writ Petition cannot be entertained. Therefore, without exhausting the alternative remedy by way of an appeal, the Writ Petition cannot be entertained. Therefore, it is open to the petitioner to challenge the impugned order before the Commissioner (Appeals) by way of an appeal. - Decided against the petitioner - W. P. No. 34481 of 2015, M. P. No. 1 of 2015 - Dated:- 20-4-2016 - M. Duraiswamy, J. For the Petitioner : Mr. T. R. Senthil Kumar For the Respondents .....

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ed with the Service Tax Commissionerate. During the course of investigation conducted in the premises of the Company, all the properties at Mahalingapuram, Chennai by the Officers of Director General of Customs, Excise Intelligence Wing, it was found that the petitioner had provided services as Marketing Agent to M/s.VIP Housing and Properties and M/s.VIP City for selling residential plots, flats and villas on commission basis, but failed to collect Service Tax on the consideration received as c .....

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generated by the details of business transaction in the Agent Code Number. The petitioner admitted that he has not registered under the Service Tax Department and therefore, not collected Service Tax either from M/s.VIP Housing and Properties and M/s.VIP City for selling residential plots, flats and villas on commission basis. Since the Assessee stopped doing real estate business since 01.04.2012, he wished to pay Service Tax liability under the Voluntary Compliance Encouragement Scheme 2013 int .....

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uch rate as is fixed under Section 75 or as the case may be 73B of the Chapter for the period of delay starting from 01.07.2014. Once the entire tax is paid, the declarant gets immunity from penalty and interest as per Section 108. As per Section 111 of the Finance Act, 2013, where the Commissioner of Central Excise has reasons to believe that the declaration made by a declarant under this Scheme is substantially false, he may, for the reasons recorded in writing, serve notice on the declarant i .....

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ary Compliance Encouragement Scheme. 3. The respondents in their counter have stated that pursuant to the summon issued on 03.09.2013, the petitioner appeared on 18.11.2013 and produced copies of IT returns and financial documents like P & L Accounts and Balance Sheets and gave a statement to the Investigating Officer stating that he got registered with the Department after commencement of investigation and he would pay the Service Tax liability, which might work out to around ₹ 28,00, .....

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l year 2010-11 by availing initial exemption of ₹ 10,00,000/- despite crossing the limit during the previous financial year 2009-10 thereby making him ineligible for the same. In view of the suppression of the value for the financial year 2009-10 and mis-declaration of the value for the financial year 2010-11, the 1st respondent termed the declaration filed by the petitioner as substantially false and authorized issue of show cause notice under Section 111 of the Finance Act, 2013. In view .....

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aring to the petitioner and thereby violated the principles of natural justice. 5. In support of his contentions relied upon the judgment reported in [2015] 63 Taxmann.com 266 (Gujarat) [ASK Me Enterprise Vs. Union of India] wherein the Division Bench of the Gujarat High Court held that the Assessee is entitled to the benefit of Voluntary Compliance Encouragement Scheme on the ground that the scheme was within the knowledge of the Assessee at the time of audit, so that the interest/penalty had n .....

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ng the contentions of the petitioner in the impugned order, therefore, the order passed by the 2nd respondent is perfectly correct and the Writ Petition is liable to be dismissed. 7. In support of his contentions, the learned counsel relied upon the following judgments: (i) 2014 (35) S.T.R. 695 (Guj.) [Ramilaben Bharatbhai Patel Vs. Union of India] wherein the Division Bench of this Court held as follows: 5. The learned counsel for the petitioner, however, raised two fold contentions. He firstly .....

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e condition of depositing 50% tax dues flowing from Section 107. It would not be possible for this Court to exercise writ jurisdiction to direct the authority, in plain terms, which the statutory provision does not permit. 7. Coming to the second contention, the scheme envisages depositing the tax dues in two stages. Only after the taxes are fully deposited stage-wise that the declaration under Section 107 would be accepted. Section 110 only pertains to recovery of the taxes declared, but not pa .....

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ested, shortfall in the taxes could be accepted after charging interest under Section 110, there was no need to make special proviso for extending time for depositing the remaining of the taxes under sub-section (4) of Section 107. Further, Section 110 pertains to compulsory recovery of taxes with interest. Sub-sections (3) and (4) of Section 107 refer to voluntary tax deposit by a declarant in terms of the scheme. Both these operate in separate fields. (ii) 2015 (37) S.T.R. 922 (Cal.) [Parijat .....

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to sub-section (3) of Section 107 and the authorities can take recourse under Section 110 of the said Act, in the event, any default is committed under the said Scheme. (iii) 2014 (35) S.T.R. 65 (P & H) [Barnala Builders & Property Consultants Vs. Dy. C.C.E & S.T., Dera Bassi] wherein the Division Bench of the Punjab and Haryana High Court held that the order passed by the Deputy Commissioner of Central Excise and Service Tax would necessarily be appealable under Section 86 of the F .....

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le to the extent of ₹ 26,93,388/-, he has projected the tax liability at ₹ 25,69,324/-, which is short by ₹ 1,24,064/-. As per Section 108 (1) of the Finance Act, the declarant can get immunity against interest liability and penalty to be imposed only for the amount paid under the scheme. In the case of the petitioner, since the declarant appears to be not declared his correct tax liability, as per the report, he may not get the immunity from the interest and penalty or any oth .....

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