2009 (12) TMI 694 - HC - Service Tax

Whether petitioner has given false particulars with regard to payment of ₹ 6 lacs? Held that - The petitioner, in fact, has made the payment of ₹ 6 lacs as the payment is duly supported by the Bank entries as well as duly receipted challans and hence there is no dispute about the payment of ₹ 6 lacs. If this payment of ₹ 6 lacs is considered then admittedly the balance amount of ₹ 8,737/- remains outstanding and on that basis the petitioner is entitled to avail the benefit of the scheme. Thus, the petitioner s application cannot be rejected on the ground that the petitioner has supplied false information with regard to payment of ₹ 6 lacs. The impugned order passed by the Respondent No. 2 is hereby quashed and set aside and the respondent No. 2 is hereby directed to issue certificate after verification of the payment of ₹ 6 lacs.

Summary

Issues:
Petition to quash order rejecting declaration on service tax payment.

Analysis:
The petitioner filed a petition under Articles 226 and 227 to challenge the order rejecting their declaration regarding the payment of service tax. The petitioner, appointed as a Direct Sales Agent for a bank, faced issues regarding the responsibility for paying service tax. Despite being unable to collect service tax from the bank, the petitioner paid Rs. 6 lacs in service tax through challans. The tax department issued a show cause notice demanding the same amount, ignoring the payment made by the petitioner. The petitioner applied under the Dispute Resolution Scheme, stating the outstanding amount was only Rs. 8,737 after the Rs. 6 lacs payment. However, the application was rejected, alleging false particulars in the declaration.

The petitioner argued that the balance sheet clearly showed the Rs. 6 lacs liability, with payments made on different dates supported by six challans. The petitioner contended that the rejection was unjust as the particulars were true and supported by evidence. The revenue's counsel claimed the rejection was due to the unavailability of challans and discrepancies between the balance sheet and the application. The revenue requested the production of challans for verification.

After considering the arguments and documents, the court found that the petitioner had indeed paid Rs. 6 lacs, supported by bank entries and receipted challans. Consequently, the outstanding amount was only Rs. 8,737, making the petitioner eligible for the scheme benefits. The court quashed the impugned order, directing the revenue to verify the Rs. 6 lacs payment and issue a certificate accordingly. The petition was allowed, and the rule was made absolute without costs.