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Manpreet Engineering and Const. Co. (Engineers and Constructor) Versus The Union of India through Central Excise and Service Tax Department and Others

2016 (7) TMI 560 - JHARKHAND HIGH COURT

Failure to deposit first installment of 50% under the VCES, 2013 (Voluntary Compliance Encouragement Scheme, 2013) - the immunity provided under section 108(1) of the Finance Act, 2013 was withdrawn, as this petitioner has not deposited 50% of the tax dues so declared under Section 107(1) and submitted the proof of such payment to the designated authority. - Held that:- so far as the payment of first instalment is concerned, which was minimum 50% of the tax dues so declared was to be paid on or .....

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ection 107(3) of the VCES, 2013 in making the payment of first instalment and hence, he is not entitled to get the benefits provided under this scheme. - Application was rightly rejected - Writ petition dismissed. - Decided against the assessee. - I.A. No. 1059 of 2015 with W.P.(T) No. 2429 of 2014 - Dated:- 26-4-2016 - MR. D.N. PATEL AND MR. ANANDA SEN, JJ. For The Petitioner : M/s Binod Poddar For The Respondent : M/s Ratnesh Kumar, Sweety Kumari This writ petition has been preferred mainl .....

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of such payment to the designated authority. As the requirement under Section 107(3) of the VCES, 2013 was not fulfilled, this petitioner was disqualified from VCES, 2013 and the immunity provided under Section 108(1) aforesaid has been withdrawn. Petitioner is challenging the order dated 7th April, 2014 passed by the respondent authorities. 2. Arguments canvassed by the counsel for the petitioner: ● Learned counsel appearing for the petitioner submitted that under the VCES, 2013, declara .....

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s given to the respondent authorities on 31st December, 2013. Interest upon belated payment has also been made by this petitioner and aforesaid cheque was also encashed on 5th February, 2014. Thus, there was no mala fide intention on the part of this petitioner. ● The petitioner was found eligble under the VCES, 2013 and no prejudice has been caused to the respondent because the amount was to be paid on or before 31st December, 2014 looking to VCES, 2013 and it is an admitted fact that thi .....

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r and VCES, 2013 should be interpreted leniently and liberally. ● It is further submitted by the counsel for the petitioner that this petitioner has been discriminated and there are several other assessees like the petitioner, who have deposited first instalment after 31st December, 2014 and no Notice has been issued to them. This aspect of the matter have not been properly appreciated by the Assistant Commissioner, Central Excise and Service Tax, Division-IV, Jamshedpur and hence, the ord .....

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nion of India ● It is submitted by the counsel for the respondent Union of India that the VCES, 2013 cannot be liberally interpreted by this court, otherwise every assessee will have his own liberal interpretation and all the clauses of the scheme will be in a floating situation and therefore, VCES, 2013 should be interpreted strictly. ● It is submitted by the counsel appearing for Union of India that as per Section 107(3) of VCES, 2013, the declarant/petitioner has to make the payme .....

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hown by the Union of India in favour of those declarants, who have missed the bus or opted to make voluntary compliance with respect to the payment of the Service Tax liabilities from the year 2007 onwards. Further, under VCES, 2013, the legally payable amount has been divided into two parts. First instalment of minimum 50% should be deposited on or before December, 2013 and the remaining amount ought to be paid on or before June, 2014. It is further submitted by the counsel appearing for the Un .....

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further submitted that it is not a matter to be interfered by this Court in exercise of its jurisdiction under Article 226 of the Constitution of India, otherwise there will be no end to liberal approach, which may vary from assessee to assessee because the tendency of an assessee is either not to make payment or to make delayed payment of the taxes. ● It is further submitted by the counsel for the Union of India that as per Section 110 of the VCES, 2013, if the declarant fails to pay the .....

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en paid on or before 31st December, 2013 as per Section 107(3) of the Finance Act, 2013, there is a clear breach of the VCES, 2013 by this petitioner. The amount cannot be deposited as per the sweetwill of the assessee. This amount has to be deposited as per the guidelines provided under VCES, 2013. For the rest amount of the first 50%, a cheque of ₹ 60,00,000/- was given on December, 2013 and that too a post-dated cheque. Date of the cheque is 30th January, 2014 and it was encashed on 5th .....

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aforesaid order dated 7th April, 2014, hence, this writ petition may not be entertained. ● It is further submitted by the counsel for the respondents that there is no question of discriminatory treatment being meted out to this declarant and that there cannot be equality in illegality. If any declarant has got the benefit of the VCES, 2013, as per the petitioner, illegally, that does not mean that this petitioner is legally entitled to get the benefit of the scheme even though the clauses .....

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ilities of a declarant and the payment was to be made within one year as provided. Every declarant cannot have his own interpretation of the provisions of the VCES, 2013 and his own style of making payment of service tax so declared by him. If the declarant wants to get the benefit of the VCES, 2013 the declarant has to obey all the clauses of the scheme. This aspect of the matter has also been properly appreciated by the Assistant Commissioner, Central Excise and Service Tax, Division-IV, Jamsh .....

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this scheme, service tax liabilities can be declared by a declarant and the relevant section is 107, which reads as under" "107(1) Subject to the provisions of the Scheme, a person may make a declaration to the designated authority on or before the 31st Day of December, 2013 in such form and in such manner as may be prescribed. (2) The designated authority shall acknowledge the declaration in such form and in such manner as may be prescribed. (3) The declarant shall, on or before the .....

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december, 2014 along with interest thereon, at such rate as is fixed under section 75 or, as the case may be, section 73B of the Chapter for the period of delay starting from the 1st day of July, 2014. (5) Notwithstanding anything contained in sub-section (3) and sub-section (4), any service tax which becomes due or payable by the declarant for the month of January, 2013 and subsequent months shall be paid by him in accordance with the provisions of the Chapter and accordingly, interest for dela .....

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form and in such manner as may be pescribed. (Emphasis supplied) (II) In view of the aforesaid provisions of VCES, 2013, this petitioner declared service tax liabilities for the period running from October, 2007 to December, 2012 amounting to ₹ 3,48,39,667/-. As per Section 107(3) as quoted above, at least 50% of this liability shall be deposited on or before December, 2013. Thus, the petitioner was liable to deposit ₹ 1,74,19,834/-, whereas he deposited ₹ 1,14,20,000/-. Thus, .....

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he Finance Act, 2013. It is submitted by the counsel for the petitioner that there was no mala fide intention on their part and a liberal interpretation of the VCES, 2013 is to be made by the court and the petitioner may be given the benefit of the VCES, 2013 because remaining was paid before 31st December, 2014. We are not accepting this argument mainly for the following reasons: (a) The VCES, 2013 is already a liberal scheme floated for those declarants, who have committed breach of the taxing .....

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une, 2014. This is the second liberal approach in the scheme floated by the Union of India (c) In the second instalment also, which was to be paid on or before 30th June, 2014, if any declarant has got any difficulty he can make the payment on or before 31st December, 2014, but, in this eventuality the payment shall be made with interest. This is the another liberal approach of the Union of India as provided under the VCES, 2013. (d) The scheme is nothing but a policy decision of Union of India .....

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ve further instalment in the first instalment to the effect that part of the payment can be made on or before 31st December, 2013 and the remaining amount can be paid later on. This is not permissible while exercising powers under Article 226 of the Constitution of India. (III) It appears on perusal of VCES, 2013 that the clauses of the Scheme are drafted very clearly and they are bereft of any ambiguity. What is to be paid that has already been mentioned in Section 107. We cannot replace all th .....

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d will say that there is substantial compliance, which will lead to nothing but chaos and court cannot be a party to this. (IV) Likewise, 'No prejudice' theory in the payment of taxes cannot be advanced by the erring assessee or erring declarant. There is no question of any prejudice caused to the Union of India and once the clauses of the VCES, 2013 is violated, the declarant is not entitled to get benefit of the said scheme. (V) Counsel for the petitioner has also submitted that never .....

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especially 107(3) thereof to accommodate the petitioner. Cheque might have been encashed, but it makes no difference because to encash it is not a violation so far as Section 107(3) is concerned. (VI) These aspects of the matter have been properly appreciated by the Assistant Commissioner, Central Excise and Service Tax, Division-IV, Jamshedpur while passing the order dated 7th April, 2014. It ought to be kept in mind that whenever such voluntary discloser scheme is floated, further leniency sho .....

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