2014 (9) TMI 879 - HC - Service Tax

Service Tax Voluntary Compliance Encouragement Scheme - Person who may make declaration of tax dues - Assessee filed declaration under Service Tax Voluntary Compliance Encouragement Scheme - Department rejected said declaration on ground that for period from 1-10-2004 to 31-3-2009, a notice under section 73 dated 19-3-2010 had culminated into an order dated 23-12-2010 and since issue in question was already covered by said notice/order, no declaration could be filed for subsequent/coinciding period 1-10-2007 to 31-12-2012 in view of second proviso to section 106(1) - Held that - the contention of the counsel for the petitioner has been that in the show-cause notice dated 19/03/2010 culminating in the order dated 23/12/2010, there was no invocation of Section 73A of the Act and therefore the proviso does not apply in the instant case, but the impugned order does not take into consideration that aspect of the matter. There is considerable force in the aforesaid submission inasmuch as the findings given in the order dated 23/12/2010 prima facie was with regard to Section 73 of the Act and not Section 73A. But the matter does not rest here. The other aspect of the matter is, one of the reasons given in the impugned order was that the earlier show-cause notice and the order dated 23/12/2010 was for the period October 2004 to March 2009, part of which period is covered under the Scheme, which was from 01/10/2007 up to 31/12/2012. It was reasoned by the respondent officer that for the period October 2007 to March 2009, there was already an order passed on 23/12/2010 and therefore, the petitioner was not entitled to file the application under the Scheme. That reason is not correct in view of the fact that the period for tax dues is 01/10/2007 up to 31/12/2012. That period cannot be related to any period in respect of which an order has been passed by the authority under Section 73 of the Act. If there were any dues between the aforesaid dates, then the eligibility to file the application under the Scheme would arise provided no order was passed prior to the enforcement of the Scheme on any issue. Therefore, linking the period of tax dues under the Scheme with the period in respect of which the order dated 23/12/2012 has been passed in petitioner s case is not correct as that order was prima facie not in respect of Section 73A of the Act Commissioner Service Tax to reconsider the issue in light of whether the earlier show-cause notice dated 19/03/2010 culminating in the order dated 23/12/2010 in respect of which certain issues arose are the very same issues which have arisen for the subsequent period namely, April 2012 to December 2012 in respect of which, the petitioner seeks benefit under the Scheme. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Challenge to order dated 31/12/2013 by Assistant Commissioner of Service Tax under the Service Tax Voluntary Compliance Encouragement Scheme, 2013.

Analysis:
The petitioner challenged the order dated 31/12/2013 by the Assistant Commissioner of Service Tax, Bangalore, under the Service Tax Voluntary Compliance Encouragement Scheme, 2013. The petitioner contended that they were eligible under Section 106 of the Scheme as no notice or order of determination had been issued prior to 01/03/2013. The main contention was that the second proviso to Section 106(1) did not apply to their case, and their application should have been considered based on the main provision of Section 106(1).

The respondents argued that the second proviso was rightly invoked and supported the impugned order. The court examined the impugned order and the relevant provisions of Section 106. Sub-section (1) of Section 106 allows for the declaration of tax dues where no notice or order of determination had been issued before 01/03/2013. The focus was on the second proviso, which prohibits the declaration of tax dues on the same issue for any subsequent period if a notice or order had been issued for a prior period.

The court noted discrepancies in the application of the proviso, especially regarding the invocation of Section 73A of the Act in the earlier proceedings. It was highlighted that the earlier order was primarily related to Section 73 and not Section 73A. The court emphasized the need for a detailed examination by the authority to determine the invocation of Section 73A in the earlier proceedings.

Additionally, the court addressed the reasoning behind the rejection of the petitioner's application based on a prior order covering a period partially overlapping with the Scheme period. The court clarified that the eligibility to file under the Scheme should be based on the absence of any prior order on the specific issues within the Scheme period. The court found the reasoning flawed and directed a reconsideration by the authority.

In conclusion, the court allowed the writ petition, quashed the impugned order, and remanded the matter to the first respondent for a thorough reconsideration. The petitioner was instructed to appear before the authority for further proceedings, emphasizing a fair and expeditious review in accordance with the law.