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TMI Blog2018 (3) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... at pages 69 and 70 of the paper book. The same reads as under:- "OFFICE OF THE COMMISSIONER: SERVICE TAX-VI:MUMBAI 1ST FLOOR: MAHAVIR JAIN VIDYALAYA: C. D. BURFIWALA MARG (JUHU LANE): ANDHERI (W): MUMBAI-400 058 Email - [email protected] Tel. No. 26210377 SPEED POST F. No. VCES/Transmedia/79(415)ST-II/2013/2356 Mumbai, the 29th Dec. 2016 To, M/s. Transmedia Software Ltd., 5, 1st Floor, Rupayatan, Irla, Vile Parle (W), Mumbai-400 056 Gentlemen, Sub: Non-Eligibility of declaration filed under Voluntary Compliance Encouragement Scheme, 2013. Kindly refer to your VCES-1 declaration application no. 79 dated 07.08.2013 for Rs. 4828491/- which was further revised to Rs. 5651696/- dt. 03.09.2013, under the Voluntary Compliance Encouragement Scheme, 2013. 2. On verification of the aforesaid VCES-1 declaration, it is observed that the declarant has paid Rs. 2900000/- by 31.12.2013 under various challans and the remaining balance amount i.e. Rs. 2751696/- along with interest of Rs. 265169/- was also paid under various challans which are as follows: Challan No. Amount Date 0023 153833/- 27.12.2014 00241 917648/- 27.12.2014 00245 655030/- 27.12.2014 01470 552500/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se services were brought within the purview of the Finance Act, 2007 and liable to payment of service tax. 7. It is claimed that the petitioner company, through oversight, did not pay the service tax from October, 2007 to December, 2012. The petitioners came across this STVCE Scheme. It is claimed that it s in the nature of an amnesty scheme for encouraging voluntary payment of service tax. Taking advantage of this scheme, the petitioners applied for the benefit in terms thereof. It is their clam that in pursuance of this scheme, they made an application on 7th August, 2013. This application was revised and the demand was stipulated at Rs. 56,51,696/-. In the meanwhile, the petitioners were visited with recovery proceeding and by coercive means, in the form of freezing of their bank account with ICICI Bank. That compelled them to approach this court in its writ jurisdiction by filing a writ petition being Writ Petition 2261 of 2013. On that writ petition, an order was passed by this court directing the respondents to consider the petitioners' application under the above scheme. That application was initially rejected on the ground that it was filed belatedly, particularly afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 10. It is in these circumstances that the petitioners would submit that the impugned communication threatening to recover the moneys by coercive means is unsustainable. They pointed out immediately, upon receipt of this communication, that the aforesaid events led to the delay. That is, therefore, deemed to have been condoned and/or in any event capable of being condoned. On these pleadings the writ petition was filed. 11. After a copy of this writ petition was served on the respondents, a reply affidavit has been filed by the second respondent. The above factual statements have not been denied, but what has been emphasised in this affidavit in para 7 reads as under:- "7. I say that, from the above table it was observed that the last two payments were made post December, 2014. In other words, the declarant had not made the mandatory balance payment of Rs. 27,51,696/- along with interest before 31.12.2014 as is required under the Proviso 4 of Section 107 of Finance Act 2013. As per proviso 4 of Section 107 of Finance Act 2013 under procedure for making declaration and payment of tax dues states that tax dues or part thereof remaining to be paid after the payment made under sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relief. Thus, the authorities administering and managing the scheme had a discretion to condone the delay, particularly when the same is bonafide. If the delay has occurred only because of miscommunication as between the petitioners and their Chartered Accountant, then, they would be entitled to seek this relief. In support of his submissions, Mr. Vashi has heavily relied upon a Division Bench judgment of this court rendered by the Nagpur Bench in the case of Vijay Omprakash Bansal vs. Commissioner of Income-Tax (2002) 257 ITR 649 . 14. Mr. Vashi would submit that there are two decisions rendered by the Punjab and Haryana High Court and the High Court of Madras. In each of these decisions, the said High Courts have taken a view that there is power to condone the delay. Once, there is above power even in respect of such voluntary scheme, then, we must not hesitate to allow the petition. 15. On the other hand, Mr. Dwivedi appearing for the respondents would submit that the decisions of this court in the above matter as also that of the other High Courts are inapplicable. In the present case, the scheme itself is clear. The scheme itself provided for relaxation. That relaxation was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hem in the Chapter or the rules made thereunder. 19. Section 106 enables a person to declare his tax 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. There are two provisos, which enable a person to make this declaration. By sub-section (2), the consequences of making a declaration are set out. The designated authority, by an order and for the reasons to be recorded in writing, reject the declaration in the event that is contravening sub-section (2) of section 106. Then comes section 107, which reads as under:- "107. Procedure for making declaration and payment of tax dues. - (1) Subject to the provisions of this 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 31st day of December, 2013, pay not less than fifty per cent. of the tax dues so declared under sub-section (1) and subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... larant have to be paid on or before 31st December, 2013 and the remaining part have to be paid by 30th June, 2014. The legislature, therefore, was of the view that a further relaxation would achieve the object and purpose of the scheme. Therefore, a proviso was provided to sub-section (4) of section 107 and which enables the person, who fails to pay said tax dues or part thereof on or before the said date, namely, 30th June, 2014, to pay the same on or before 31st day of 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. Thus, this was a concession or relaxation given, but not without condition. There was a condition, namely, to pay interest and within the outer time limit. 21. Sub-section (5) of section 107 would say that notwithstanding anything contained in sub-section (3) and subsection (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 delay in payment thereof, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fancies. Equally, the Revenue and its department cannot, by its whims and fancies, allow any defaulter to pay the taxes after the due date is over long time back. The plain duty of the departmental officials is to assess the tax payable and within the period prescribed by the statute. Any such scheme would not enable the authorities to extend the period of compliance stipulated by law and defer the tax liability indefinitely. It is not expected of them to show undue favour dehors the statute. We are of the firm opinion that the judgments of this court as also the other High Courts relied upon by Mr. Vashi are distinguishable on facts. 24. In the case before this court in the case of Vijay Omprakash Bansal (supra), the petitioner Vijay Bansal was assessed to income-tax for a number of years and he wanted to avail of the benefit under the Kar Vivad Samadhan Scheme, 1998. Under that scheme, the assessee is required to make payment of the required amount stated to be around 30% of the full assessment within a period of thirty days after the required amount is communicated to the assessee. In the event the amount is so paid, it is accepted as a one time full settlement. The petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Haryana High Court. The relevant paragraphs read as under:- "7. Mr. Sawhney submits that section 67 lays down as inflexible rule and according to this provision the deposit has to be made within a period of three months from the date of declaration. Any failure renders the declaration and the deposit non-est. This contention cannot be accepted. The Government of India has itself issued a circular dated September 3, 1998. By this circular it has been, inter alia, provided by the Board that the period for calculating interest will be 90 days from the date of declaration. If the 90th day happens to be a bank holiday, payment on the 91st day being the next working day would be valid. Thus, it is clear that section 67 does not embody a totally inflexible rule. When things are beyond the control of the citizen, certain moving space is normally allowed. This is precisely what the petitioner is wanting in the present case. 8. Taking the totality of circumstances into consideration it appears that the petitioner was unable to make the deposit on account of reasons beyond her control. The Revenue has suffered no loss as the interest for three months, viz., Rs. 33,000, has been deposite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax liability in advance. They knew that there was already relaxation/extension granted.. Those who have not cleared the tax liability by the end of June, 2014 got one more opportunity and they had to make the payment on or before 31st December, 2014. The petitioners were desirous of obtaining benefit and concession under the STVCE Scheme. They were bound by the stipulations thereof. They knew the liability had to be cleared by 31st December, 2014. They made some payment after availing of the relaxation and by further relaxation, which was available till 31st December, 2014, they definitely could have made the deposit. How there could be a miscommunication is, therefore, not clear at all. The reason now assigned and in the memo of the petition is clearly an afterthought. We are in respectful agreement with the High Court of Jharkhand that when this is the nature of the stipulations in the scheme, any view taken contrary to the same would be rewriting the scheme itself or prescribing conditions which are not specifically imposed. The argument canvassed before the High Court was identical. It was rejected with the following reasoning:- "We are not accepting this argument mainly for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The so called theory argued by the counsel for the petitioner, viz, 'substantial compliance' has no place in a taxing statute, otherwise every declarant or assessee will partly comply with a scheme or provision of the taxing statute and 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 any objection was raised by the respondent while receiving the post-dated cheque. This cheque was given on 31st December, 2013 and the date of the cheque was 31st January, 2014. (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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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