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2018 (3) TMI 931

doned, because the scheme is not open ended - Held that: - 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. - This is not an open ended scheme. The benefits thereunder cannot be derived dehors the scheme or after its life or duration has come to an end. The relaxation or concession, which can be granted in terms of the scheme have been outlined in the scheme itself and particularly by sub-section (4) of section 107. It is not the intent that the tax dues for the period 1st October, 2007 and ending on 31st December, 2012 and the liability in that behalf can be discharged in the manner chosen by the assessee or as per his whims and fancies. Equally, the .....

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er the Voluntary Compliance Encouragement Scheme, 2013. 2. On verification of the aforesaid VCES-1 declaration, it is observed that the declarant has paid ₹ 2900000/- by 31.12.2013 under various challans and the remaining balance amount i.e. ₹ 2751696/- along with interest of ₹ 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/- 02.01.2015 01500 737854/- 02.01.2015 From the above table it is observed that the last two payments were made post December 2014. In other words, the declarant has not made the mandatory balance payment of ₹ 2751696/- alongwith interest before 31.12.2014 as is required under the Proviso 4 of Section 107 of Finance Act 2013. 3. 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-section (3) shall be paid by the declarant on or before the 30th day of June, 2014: Provided that where the declarant fails to pay said tax dues or part thereof on or before the .....

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ing 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 after initiation of the recovery proceedings. The petitioners represented on 10th September, 2013 by pointing out that they had been throughout seeking benefit of the scheme and had made an application. Therefore, their application cannot be rejected on such ground. After considering the petitioners' reply, the respondents came to the conclusion on 27th December, 2013 that the scheme was applicable and the petitioners could have taken the benefits thereof. The Assistant Commissioner of Service Tax made that order by firstly holding that the provisions of the scheme dated 13th May, 2013 specifies the period for which this application can be made. The cut off date for making that application was 1st March, 2013. The Anti E .....

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made post December, 2014. In other words, the declarant had not made the mandatory balance payment of ₹ 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-section (3), shall be paid by the declarant on or before the 30th Day of June, 2014: Provided that where the declarant fails to pay said tax dues or part thereof on or before the said date, he shall pay the same on or before the 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, if the declarant fails to pay as required above, he would not be eligible to avail the benefit of the scheme. 12. It is, therefore, claimed in this affidavit that the petitioners cannot insist on the delay being condoned, because the scheme is not open ended. The cases relied upon by the petitioners are distinguishabl .....

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one 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 granted as is evident by sub-section (4) of section 107. By proviso to that sub-section, the outer limit was specified. Once that was specified and that too in a voluntary scheme, then, there is no scope for extending the time. That would be doing violence to the plain language of the scheme and the statute. This court cannot in its discretionary and equitable jurisdiction rewrite the scheme or make any further provisions conferring a discretionary power in the authorities. Once such is the prescription, then, the writ petition is entirely misconceived as there is no error of law warranting interference in writ jurisdiction. 16. In support of his submissions, Mr. Dwivedi has heavily relied upon a Division Bench judgment of the High Court of Jharkhand at Ran .....

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ke 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 submit proof of such payment to the designated authority. (4) The tax dues or part thereof remaining to be paid after the payment made under sub-section (3) shall be paid by the declarant on or before the 30th day of June, 2014: Provided that where the declarant fails to pay said tax dues or part thereof on or before the said date, he shall pay the same on or before the 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. (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 s .....

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o 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, shall also be payable under the Chapter. The discharge of the dues is to be obtained in terms of sub-section (7) of section 107 after furnishing of details of full payment of declared tax dues. It is then, by section 108, immunity from penalty, interest and other proceedings is granted. If, therefore, the payment is made in accordance with the scheme, then, the benefits would follow. 22. We are unable to agree with Mr. Vashi that section 110 having not been noticed in the judgment of the High Court of Jharkhand, it does not have any persuasive value. Even if we peruse section 110, it sets out the consequences of failing to pay the tax dues. Therefore, a declaration by the declarant indicating the tax dues oblige him to clear the same and as declared by him. If he fails to pay .....

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mber 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 was communicated that under the said scheme, his liability will be ₹ 2,18,451/-. The intimation was given to him on 10th December, 1998. The last date for making payment was 9th January, 1999. On 9th January, 1999, the petitioner went to the Income Tax Department to deposit the amount only to learn that the payment is to be made in a Nationalised bank. 9th January, 1999 was Saturday and therefore, he made payment on 11th January, 1999 by a challan in a Nationalised bank. The department, however, rejected the claim for one time settlement on the ground that the payment was not made within time. However, before rejecting the claim, a notice was issued on 3rd November, 1999 and a rejection order was passed on 28th January, 2000. That is how a writ petition was filed and the .....

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eyond 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., ₹ 33,000, has been deposited by the petitioner. Still further, it is also clear that a declaration under the scheme could be made on or before december 31, 1997. The tax along with interest could have been deposited on or before March 31, 1998. Any deposit before that should not be considered as being beyond the scheme. In any event, the interest having been paid, the Revenue has suffered no loss. 25. It is this view, which has been followed in the case of E. Prahalatha Babu vs. The Commissioner of Income Tax Tamil Nadu 1999(IIII) CTC 369. There, the facts were very peculiar, though the scheme was under the Finance Act, 1997. There, the petitioner filed a declaration before the due date. He did not pay any tax along with the returns. The tax ought to have been paid on or before 28th March, 1998 before .....

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e 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 the following reasons: a) The VCES, 2013 is already a liberal scheme floated for those declarants, who have committed breach of the taxing statute, especially in payment of Service Tax. Thus, the scheme itself is a liberal approach of the Union of India to encourage voluntary declaration. b) Looking to the clauses of the VCES, 2013, especially, 107 thereof, the payment of the service tax liability is divided into two instalments. First instalment is of minimum 50% to be paid on or before 31st December, 2013, whereas the remaining amount of the service tax liability is to be discharged by the assessee-declarant on or before 30th June, 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 o .....

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e 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 floated, further lenience should not be given by the court to the declarant apart from what has been provided under the scheme, otherwise, there will be no end of liberal approach. Moreover, payment of tax has a direct nexus with the budget of the country. There are fixed dates for payment of taxes. Realisation of taxes after due date is a matter of policy decision of the Union of India. Hence, this court will not extend the period for the payment of tax dues unless the scheme in question gives that liberty to the declarant. As stated hereinabove, in the facts of the present case, 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 before 31st December, 2013 and there is no provision under the VCES, 2013 for re .....

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