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READING DOWN MODEL IGST ACT - (SETTLEMENT OF CASES)(PART-11)

Goods and Services Tax - GST - By: - Dr. Sanjiv Agarwal - Dated:- 4-8-2016 - Chapter VIII comprising of Sections 11 to 26 of the Model IGST Law provide for settlement of cases. There is no provision for settlement in Model GST Law but Chapter XX of the said Act states that at present, the provisions for settlement of cases are incorporated under IGST Act. It appears that similar provisions may be contained in CGST law. Under the present law, provisions for settlement of cases do exist, both in S .....

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e-time tax evader or an un-intending defaulter can make clean his affairs through Settlement. Any defaulting person can admit his guilt, pay taxes with applicable interest and avoid further liabilities. Settlement Commission can grant waiver/reduction of penalty, fine or interest Settlement Commission can grant immunity from prosecution to assessee, its directors and partners. In Rajshri Plastiwood Ltd 2001 (3) TMI 322 - SETTLEMENT COMMISSION, CUSTOMS & CENTRAL EXCISE it was held as under - .....

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clean breast of his affairs, but would also unnecessarily strain the investigation resources of the department in case of doubtful benefit to revenue while needlessly proliferating litigation and holding up collections. We would, therefore, suggest that there should be a provision in law for a settlement with a tax payer at any stage of the proceedings . Bombay high court in A Mahesh Raj 2001 (6) TMI 227 - SETTLEMENT COMMISSION, CUSTOMS & CENTRAL EXCISE held that settlement machinery is mean .....

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rt should adopt construction which advances, fulfils and furthers the object of the Act rather than the one which would defeat the same and prevent settlement. A rigid attitude would inhibit a one-time tax evader or un-intending defaulter from making a clean breast of his affairs and would also unnecessarily strain the investigation resources of the Government. In CCE, C& ST, Bhubaneshwar-I v. Vedanta Aluminum Ltd. 2016 (4) TMI 932 - CALCUTTA HIGH COURT , it was held that 'settlement' .....

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judication', instead of filing a reply to the notice and having the case adjudicated, filed applications before the Commission for settlement. Statutory Provisions in Draft IGST Law Model IGST law contains the following provisions in relation to settlement of cases Section Provision Relating to 11 Definitions - bench, case, Settlement Commission etc 12 Constitution of National Goods and Service Tax Settlement Commission 13 Jurisdiction and Powers of Settlement Commission Settlement Commissio .....

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has been a high court judge, the qualification, eligibility, manner of selection and appointment of chairman and members shall be prescribed on the recommendations of GST Council. The matters dealt with by the Commission shall be decided by majority and where the views are equally divided, the matter will be referred to third member and then decided by majority accordingly. Cases SC will settle the cases. What is meant by 'case' is defined in section 11 (b). Accordingly, case would mean .....

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connection with levy, assessment or collection of IGST on the date of application before SC. What is important is that the matter must relate to levy / assessment / collection / appeal of IGST and pending on the date of making application for settlement. Where an order is passed by an adjudicating authority and for which the appeal period has not expired shall also be deemed to be a proceeding pending. Following cases shall not be covered within the scope of 'case' for consideration by t .....

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and manner of application shall be prescribed. The application should contain a full and true disclosure of his tax liability which has not been disclosed before the jurisdictional IGST officer, the manner in which such liability has been derived, the additional amount of tax accepted to be payable by him and such other particulars as may be prescribed. Following are the pre-conditions for making the application to SC- the applicant has furnished the return(s), which he is or was required to fur .....

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f the CGST Act In case of non-filing of return, if SC is satisfied that there exists reasons for non-filing of returns, it may allow the application to be made, after recording reasons for the same. It has also been provided that - No application shall be entertained by the Settlement Commission in cases which are pending with the Appellate Tribunal or any Court. No application shall be made for determination of any question having a bearing on the rate of tax or determination of liability to pa .....

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n writing as to why the application made by him should be allowed to be proceeded with, and after taking into consideration the explanation provided by the applicant, it shall, within a period of forty five days from the date of the notice, by an order, allow the application to be proceeded with, or reject the application as the case may be, and the proceedings before the Settlement Commission shall abate on the date of rejection. An application shall not be rejected unless an opportunity has be .....

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from the Settlement Commission. Where the jurisdictional IGST officer does not furnish the report within the aforesaid period of sixty days, the Settlement Commission shall proceed further in the matter without the report of such officer. After examination of the report of the jurisdictional IGST officer received, if the Settlement Commission is of the opinion that any further enquiry or investigation in the matter is necessary, it may, within 15 days of the receipt of the report, direct, for r .....

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mission may pass such order as it thinks fit on the matters covered by the application and any other matter relating to the case not covered by the application, but referred to in the report. An order shall not be passed in respect of an application after twelve months from the last day of the month in which the application was made, failing which the settlement proceedings shall abate. The order passed shall provide for the terms of settlement including any demand by way of tax, interest, fine .....

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, fine and penalty payable in pursuance of an order is not paid by the taxpayer within thirty days of receipt of a copy of the order by him, or within such period as extended by the Settlement Commission not exceeding three months, the amount which remains unpaid, shall be recovered along with interest due thereon at the rate prescribed under section 36 of the CGST Act. Order of Commission shall be conclusive and no matters covered by such order can be reopened (except as provided in section 18) .....

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