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2016 (5) TMI 229 - CALCUTTA HIGH COURT

2016 (5) TMI 229 - CALCUTTA HIGH COURT - 2016 (42) S.T.R. 431 (Cal.) - Evasion of service tax - cognizable offence and is hit by Section 89(1) - Violation of conditions of Bail - t bail granted to the appellant was on the basis of his undertaking that he shall make the entire balance amount within fifteen days from the date of release on bail. After bail was granted, he had filed writ petition on 23rd November, 2015 challenging the remand application. - Earlier the VCES application was rejected .....

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had admitted that a sum of ₹ 1,81,80,941/- is due and payable, however in paragraph 4 of the writ petition it has been stated that if adjudicated the amount would be less than ₹ 50 lakhs. So the stand of the appellant is inconsistent. Moreover, the orders of rejection have gone unchallenged. Therefore, the learned Judge was justified in dismissing the writ petition. The respondents are entitled to cost, which is assessed at ₹ 10,200/-. - Decided against the appellant - MAT 1806 .....

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rit petitioner whereby the writ petition was dismissed by holding as under: Let the affidavit of service filed today be kept on record. The subject matter of challenge in the instant writ proceeding - a remand application dated 8th September, 2015 - arises due to evasion of payment of service tax by the petitioner. In the instant writ petition the petitioner seeks, inter alia, issuance of a mandatory order commanding the concerned respondent authorities to cancel and/or withdraw and/or rescind o .....

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ourt s order dated 3rd November, 2015. It is quite evident that a criminal proceeding has been initiated against the petitioner, which is pending before the learned Additional Chief Judicial Magistrate at Alipore (South 24 Parganas). The records reveal that the petitioner was taken into custody and he subsequently applied for bail before this Court. An order was passed on 3rd November, 2015, whereby bail was granted primarily based on an undertaking given by the petitioner that he would pay the .....

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ature. For such discretionary relief to be granted, the petitioner has to demonstrate unimpeachable bona fides. This is precisely why a writ petitioner requires to make in his/her petition a specific averment to the effect that the application is made bona fide and for the ends of justice. In the facts of this instant case, this application is not made bona fide by the petitioner. The reason is, a person who gives an undertaking before this Court - which evidently is not complied with, subsequen .....

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by the appellant, inter alia, praying for the following reliefs: a) A writ or writs, order or orders, direction or directions in the nature of Mandamus commanding the respondents to cancel and/or withdraw and/or rescind the said remand application dated 8th September, 2015; b) A writ or writs, order or orders, direction or directions in the nature of Mandamus commanding the respondents to determine the valid and legitimate dues to Central Government on account of Service Tax from all the three .....

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in the nature of Mandamus commanding the respondents not to take any action on the basis of the said rejected VCES applications which have been rejected by the respondents themselves; It is evident from the order under challenge that the writ petitioner had gone back from the undertaking to pay the entire balance amount within fifteen days from the date of release of the petitioner on bail. As payment was not made, the learned Judge found that the writ petition lacked bona fide and it was summar .....

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dertakes that the balance amount will be paid within a period of fortnight after he is released on bail. The petitioner further submits that only on the basis of memo of arrest, he has been arrested. There is no such formal FIR or written complaint till date. The petitioner is in custody for 56 days. Heard the learned advocates appearing on behalf of the petitioner as well as the opposite party. Considering the materials on records annexed to this application, I am inclined to grant bail to the .....

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adjudication of the claim and if it is found that the claim is beyond ₹ 3,56,52,323/-, the same will be realized in due course by the said authority. This application for bail is, thus, disposed of. The facts of the writ petition are that the petitioner carrying on three businesses, as mentioned in the writ petition and having service tax registration number, had opted for the benefits under the Service Tax Voluntary Compliance Encouragement Scheme, 2013, (for short VCES )which came into e .....

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ted authority on or before 31st December, 2013 in such form and in such manner as may be prescribed. Section 107(2) of the VCES postulates that the authority shall acknowledge the declaration in such form and in such manner as may be prescribed. Section 107(3) of the VCES lays down that the declarant shall, on or before the 31st December, 2013 pay not less than fifty per cent of the tax dues so declared under Section 107(1) and submit proof of such payment to the designated authority. Section 10 .....

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declaring outstanding service tax to the tune of ₹ 1,35,79,114/-, ₹ 1,37,96,122/- and ₹ 82,77,087/- totalling ₹ 3,56,52,323/-, as evident from the writ petition. Thereafter, the applications were considered. Since it was found that the declaration was incorrect as proceeding was pending and was in violation of proviso to Section 106(1), the applications relating to of M/s. Park Indicom Private Ltd. and M/s. Park International were rejected by orders dated 7th May, 2014 an .....

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for time. Thereafter, since the appellant defaulted, the service tax authorities issued a notice intimating that as the appellant had failed to pay 50% of the tax dues by 31st December, 2013, he was not entitled to the benefits of VCES and was directed to pay the government dues so declared in the applications within ten days, failing which recovery proceeding under Section 87 of the Finance Act, 1994 would be initiated against him. Thereafter the appellant, by letter dated 24th June, 2014, pray .....

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ax vide Section 83 of the Finance Act, 1994. Subsequently the appellant filed an application for bail under Section 439 of the Code of Criminal Procedure and an order was passed on 3rd November, 2015. Thereafter, he had affirmed the writ petition on 23rd November, 2015 which was dismissed, as noted. Mr. Bikash Ranjan Bhattacharya, learned senior advocate appearing on behalf of the appellant submits that as the applications with regard to M/s. Park Indicom Private Ltd. and M/s. Park International .....

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r Section 110 of the Act where the declarant fails to pay the tax dues either fully or in part as declared by him along with interest, recovery is to be done under Section 87 of the Act, it is clear that unless adjudication proceedings are initiated and concluded, nothing can be recovered from the appellant and, therefore, the remand notice is bad. Assuming there was a failure on the part of the declarant under Section 111(3) of the Act, show cause notice has to be issued under Sections 73 and 7 .....

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t in accordance with law. In support of his submission reliance has been placed on the following judgments: a) ICICI Bank Limited -vs- Union of India & Anr.:2015-(SRI)-GJX-0118- Bom b) Lee Young Sang & Anr. -vs- Board of Trustees for the Port of Calcutta: 1999 CWN 230. Mr. S.B. Saraf, learned advocate appearing along with Mr. K.K. Maity, learned advocate for the respondents submits that the very conduct of the appellant shows that he has not come with clean hands. Submission is having be .....

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ellant failed to make a true declaration under Section 111(1), as under sub-section (3) thereof, the notice to show cause should be treated as a notice under Section 73 or Section 73(a) of that chapter, the Department is free to proceed under Section 87 as well as under Section 89 of the Finance Act, 1994. Submission is the matter is covered under Section 89(1)(d) and not under Section 89(1)(a) as contended on behalf of the appellant. Since the appellant had collected the money as service tax an .....

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esh & Ors.: (2010) 2 Supreme Court Cases 114. Learned advocates for the parties have relied on the unreported judgment delivered on 7th August, 2015 in MAT 1122 of 2014 with CAN 7087 of 2014 (Commissioner of Service Tax Commissionerate -vs- Parijat Vyappar Private Ltd. & Ors.). The issues which require consideration are (i) whether the appellant had gone back from the undertaking and (ii) whether the remand application dated 8th September, 2015 filed on behalf of the service tax authorit .....

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dues had filed the remand application. After the remand application was filed, the appellant had filed an application for grant of bail and on his undertaking to pay the entire balance amount bail was granted. The question is whether the appellant lacks bona fide. We find that bail granted to the appellant was on the basis of his undertaking that he shall make the entire balance amount within fifteen days from the date of release on bail. After bail was granted, he had filed writ petition on 23r .....

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olating such order to hear him on merits. We are not unmindful of the situation that refusal to hear a party to the proceeding on merits is a drastic step and such a serious penalty should not be imposed on him except in grave and extraordinary situations, but sometimes such an action is needed in the larger interest of justice when a party obtaining interim relief intentionally and deliberately flouts such order by not abiding by the terms and conditions on which a relief is granted by the Cour .....

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