Service Tax — Payment by cheque — Delay in encashment beyond due date — No interest/penalty charged

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..... f the Central Government Account (Receipts and Payments) Rules, 1983 inter alia provides that Government dues including taxes can be credited by the taxpayers directly into any branch of an authorised Bank. As per Rule 79 of the Treasury Rules of the Central Government, such payments/credits can be made by cheques also. Accordingly, a large number of tax payers including the Service tax assessees .....

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..... actice has developed presumably because the Rule 79(1)(a) of the Treasury Rules inter alia states that "------, until the cheque is cleared, the Government cannot admit that payment has been received; ---------" 4. A number of representations have been received in this Directorate stating that recovery of interest and imposition of penalty in the cases where cheques have been deposited before du .....

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..... onious reading of the provisions of Rule 7 of the Central Government Account (Receipts and Payment) Rules and Rules 79 80 of the Treasury Rules, makes it clear that the Government dues can be presented in the form of cheque into the authorized Bank. And if the cheque is not dishonored later, the payment shall be deemed to have been made on the date when the cheque was handed over to the Governme .....

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