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TMI Blog2014 (5) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... same would be included in the definition of the expression "tax dues" if the same has not been paid as on 1.3.2013. If the intention of the legislature was to exclude any tax deposited before the framing of the scheme, the same could have been provided in plain language. On the contrary, the legislature excluded from the purview of declaration only those taxes which were already paid by 1.3.2013. The period between 1.3.2013 and 10.5.2013 would, by necessary application of the provision of the scheme, be covered for declaration under the Scheme itself. In our understanding, for a valid declaration two of the essential conditions were that the proceedings for either declaration or recovery of the tax dues should not be pending on 1.3.2013 and secondly that the tax should not have been deposited before the said date. In the present case, both the conditions were fulfilled. Validity of CBEC circular dated 8.8.2013 - Held that:- It is well settled in law that an authority cannot, through a circular or clarification, override the provisions of the statute. In the present case, till the Scheme was framed the amount thus remained with the department by way of a deposit. Once the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted total sum of Rs.35.51 lakhs with the department. On 14.7.2013 the petitioners deposited further amount with the department so that inclusive of the previous deposit of Rs.35.51 lakhs, the total deposit with the department made by the petitioners came to Rs.47,79,770/-. This was towards the petitioners' unpaid service tax liability upto 31.3.2013 as per the calculations of the department. 3. Under the Finance Act, 2013, the legislature introduced the said Scheme of 2013 under Chapter VI of the Act. Under certain circumstances a person could make a declaration to the designated authority of his tax dues. Upon acceptance of such declaration the designated authority would grant immunity from penalty, interest and other proceedings as per section 108 of the Finance Act, 2013 covering such tax dues. The controversy is with regard to the correct interpretation of term tax dues defined in section 105(1)(e) of the Finance Act, 2013. 4. On 24.8.2013 the petitioners declared tax dues of Rs.43,61,719/-. The petitioners filed a revised declaration on 30.12.2013 and revised the amount of tax dues to Rs.45,76,476/-. This amount included the sum of Rs.35.51 lakhs deposited by the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he designated authority, however, by his impugned order dated 31.12.2013 acknowledged the declaration of the petitioners only to the extent of tax dues to the tune of Rs.10,24,656/-. This was an amount we may recall deposited by the petitioners after 10.5.2013. In the impugned order the designated authority has not assigned any reason. However, apparently he stuck to his position indicated in the show cause notice and bifurcated the declaration of the petitioners in two parts concerning tax dues which were deposited after 10.5.2013; he accepted the declaration. Regarding the amounts deposited before 10.5.2013 but after 1.3.2013 he, as provided in a clarification contained in circular dated 8.8.2013 and did not cover the said amount of Rs.31.51 lakhs under the certificate of acknowledgment of the declaration of the petitioners. 7. After receiving such acknowledgment the petitioners made further representations to the respondents without any response from the respondents. Hence this petition. 8. Learned counsel Mr.Paresh Dave for the petitioners taking us through various provisions of the Scheme contended that the legislature defined the term tax dues in a particular manner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) Any person may declare his tax dues in respect of which no notice or an order of determination under section 72 or section 73 or section 73A of the Chapter has been issued or made before the 1st day of March, 2013: Provided that any person who has furnished return under section 70 of the Chapter and disclosed his true liability, but has not paid the disclosed amount of service tax or any part thereof, shall not be eligible to make declaration for the period covered by the said return: Provided further that where a notice or an order of determination has been issued to a person in respect of any period on any issue, no declaration shall be made of his tax dues on the same issue for any subsequent period. Where a declaration has been made by a person against (2) whom,- an (a) inquiry or investigation in respect of a service tax not levied or not paid or short levied or short-paid has been initiated by way of- (i) search of premises under section 82 of the Chapter; or (ii) issuance of summons under section 14 of the Central Excise Act, 1944 (1 of 1944), as made applicable to the Chapter under section 83 thereof; or (iii) requiring production of accounts, documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed. 13. Section 108 pertains to immunity from penalty, interest and other proceedings and reads as under:- 108. Immunity from penalty, interest and other proceedings.- (1) Notwithstanding anything contained in any provision of the Chapter, the declarant, upon payment of the tax dues declared by him under sub-section(1) of section 107 and the interest payable under the proviso to sub-section(4) thereof, shall get immunity from penalty, interest or any other proceeding under the Chapter. (2) Subject to the provisions of section 111, a declaration made under sub-section (1) of section 107 shall become conclusive upon issuance of acknowledgment of discharge under sub-section (7) of section 107 and no matter shall be reopened thereafter in any proceedings under the Chapter before any authority or court relating to the period covered by such declaration. 14. Section 114 of Finance Act, 2013 authorizes the Central Government by issuing notification to make rules for carrying out the provisions of the Scheme. In exercise of such powers, the Central Government has framed the rules called Service Tax Voluntary Compliance Encouragement Rules, 2013.' 15. From the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed before the framing of the scheme, the same could have been provided in plain language. On the contrary, the legislature excluded from the purview of declaration only those taxes which were already paid by 1.3.2013. The period between 1.3.2013 and 10.5.2013 would, by necessary application of the provision of the scheme, be covered for declaration under the Scheme itself. In our understanding, for a valid declaration two of the essential conditions were that the proceedings for either declaration or recovery of the tax dues should not be pending on 1.3.2013 and secondly that the tax should not have been deposited before the said date. In the present case, both the conditions were fulfilled. 18. The respondents, as we have noticed, rely on clarification issued by CBEC in the circular dated 8.8.2013. In response to a query whether the person who has made the payment of tax dues before the Scheme was notified and would later on make a declaration under the Scheme, would such a declaration be valid, the response was that the immunity from interest and penalty is only for tax dues declared under the Scheme. If any tax has been paid prior to the enactment of the Scheme, liability of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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