2015 (10) TMI 519 - HC - Service Tax

Default in availing benefit of Service Tax Voluntary Compliance Encouragement Scheme 2013 Petition for seeking Writ of Certiorari Petitioner had to submit 50% of his dues within the time prescribed under the scheme and defaulted Held That - Admitted tax dues not remitted and deposited even under the scheme, the Petitioner cannot fault the authorities for addressing the impugned communications, recovering tax dues by coercive means Petitioner is clearly in arrears of the dues and has no legal right thus cannot insist on the recovery Found no merit Appeal dismissed and decided in favour of the Respondent.

Summary

Issues:
Petition under Article 226 seeking a writ of certiorari to quash office letters issued by Respondent No.2. Petitioner availed Service Tax Voluntary Compliance Encouragement Scheme 2013 but failed to comply with payment conditions.

Analysis:
The Petitioner, a proprietor of a firm, sought relief under the Service Tax Voluntary Compliance Encouragement Scheme 2013 to declare tax dues from October 2007 to December 2012. The Scheme required payment of at least 50% of the dues by December 31, 2013, with the remainder to be paid by June 30, 2014. The Petitioner declared dues amounting to Rs. 96,28,837, with 50% calculated at Rs. 48,14,419. However, the Petitioner failed to meet the payment deadline due to personal difficulties.

The Court noted that there was no legal provision allowing defaulters to continuously delay tax payments and seek concessions based on personal circumstances. Even under the Scheme, if tax dues are not remitted, authorities have the right to recover them through coercive means. The Court emphasized the distinction between different types of taxes, stating that funds with the Income Tax Authorities cannot be used to offset service tax liabilities.

Highlighting the Parliament's authority to enact tax laws, the Court emphasized that the Petitioner was clearly in arrears of service tax payment. The Court rejected the Petitioner's argument that recovery should be done in a specific manner, stating that as long as the recovery methods are legal, the Court cannot intervene based on the defaulter's preferences. The Court emphasized that the mandate under section 87 of the Act is to recover tax dues, not according to the defaulter's wishes.

Ultimately, the Court dismissed the Writ Petition, ruling that the Petitioner had no legal right to demand a specific recovery method and that the exercise of discretionary jurisdiction was unwarranted. The Petitioner's inability to comply with the Scheme's payment conditions led to the dismissal of the petition, with no costs imposed on either party.