2015 (6) TMI 1029 - HC - Service Tax

Service Tax Voluntary Compliance Encouragement Scheme, 2013 (VCES) - Short and delayed payment of duty of ₹ 439/- - Amt short paid at the time of making first instalment but was subsequently paid at the time of second instalment - bonafide mistake pertaining to calculation of tax - Superintendent of Service tax initiated action under Section 87 of the Finance Act, 1994, and directed the petitioner No. 1 to pay an amount of ₹ 25,85,877/- as Tax Dues immediately along with interest at the applicable rate under Section 75 of the Finance Act, 1994, notwithstanding the fact that the said amount has already been paid in its entirety and duly accepted by the concerned Service Tax authorities. Held that - Secretary, Ministry of Finance, Department of Revenue, Government of India, New Delhi, is directed to consider this rather unique case of the writ petitioners and take an appropriate decision in the matter supported with cogent reasons, as expeditiously as possible. - Petition disposed of

Summary

Issues:
Short and delayed payment under the Service Tax Voluntary Compliance Encouragement Scheme, 2013.

Analysis:
The petitioner voluntarily declared a tax liability under the Service Tax Voluntary Compliance Encouragement Scheme, 2013, amounting to &8377; 25,85,877/-. The scheme required payment in two instalments, with the first instalment not less than 50% of the declared tax, to be paid by a specified date. The petitioner, however, paid &8377; 12,92,500/- instead of &8377; 12,92,939/- in the first instalment, resulting in a short payment of &8377; 439/-. This shortfall was rectified by paying the deficit amount along with the balance in the second instalment, all within the stipulated time frame.

The petitioner claimed that the short payment of &8377; 439/- in the first instalment was due to a bona fide mistake in calculating the tax amount. Despite this, the Superintendent of Service Tax initiated action under Section 87 of the Finance Act, 1994, demanding the petitioner to pay the entire declared tax amount of &8377; 25,85,877/- along with interest. This demand was made even though the entire tax liability had been paid and accepted by the relevant authorities.

The High Court, considering the unique circumstances of the case, directed the Secretary, Ministry of Finance, Department of Revenue, Government of India, to review the matter and make a decision supported by reasons within a specified timeframe. The court emphasized the need for an expeditious resolution, preferably within eight weeks but not later than twelve weeks from the date of communication of the court's order to the concerned authorities. Additionally, the court allowed the parties to obtain urgent certified copies of the order for their records.

In conclusion, the judgment addressed the issue of a short and delayed payment under the Service Tax Voluntary Compliance Encouragement Scheme, 2013, highlighting the importance of rectifying genuine mistakes and ensuring a fair and timely resolution in tax matters.