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TMI BlogAudit initiated against service recipient cannot be a ground to reject VCES declaration of the AssesseeX X X X Extracts X X X X X X X X Extracts X X X X ..... Audit initiated against service recipient cannot be a ground to reject VCES declaration of the Assessee - By: - Bimal jain - Service Tax - Dated:- 23-1-2015 - - Dear Professional Colleague, Audit initiated against service recipient cannot be a ground to reject VCES declaration of the Assessee We are sharing with you an important judgment of Hon ble High Court, Madras, in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ovieya Builders Vs. Commissioner of Customs, Central Excise and Service Tax (Appeals), Coimbatore [ 2014 (12) TMI 629 - MADRAS HIGH COURT ] on following issue: Issue: Whether Audit initiated against service recipient can be ground to reject VCES declaration of the Assessee ? Facts and background: Ovieya Builders ( the Petitioner ) was engaged in the activities of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction and had carried certain construction works for M/s. Shobika Impex Private Limited ( SIPL ). An audit was conducted to the accounts of SIPL and pursuant to the said audit, the Department sent a letter dated March 7, 2013 to the Petitioner stating that during the course of audit of accounts of SIPL, it revealed that the Petitioner has neither taken out Service tax registration nor pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Service tax on the services provided by the Petitioner. Therefore, the Petitioner was advised to take Service tax registration and follow all the statutory procedures to pay Service tax, along with interest. Vide letter dated March 8, 2013, the Petitioner admitted its Service tax liability and agreed to pay tax at the earliest. However, the Petitioner faced certain difficulties in getting reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istration due to which Service tax could not be deposited. Thereafter, the Department issued a Show Cause Notice dated July 31, 2013 to the Petitioner demanding Service tax along with interest. The Petitioner submitted an interim reply dated September 18, 2013 informing the Department about their willingness to opt for Voluntary Compliance Encouragement Scheme ( VCES ). On December 24, 2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the Petitioner filed a declaration under VCES which was rejected by the Department on the ground that audit was initiated before March 1, 2013 and accordingly in terms of Section 106(2) of the Finance Act, 2013 , the Petitioner is not eligible to avail the benefit of VCES. Held: Being aggrieved, the Petitioner filed a Writ Petition before the Hon ble High Court of Madras arguing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat no audit had been initiated against them and objection, if any, had been raised against them was only on March 7, 2013 and not prior to that. The Hon ble High Court of Madras after observing that there was no audit initiated/ conducted against the Petitioner or in business premises of the Petitioner, held that: Audit of service recipient, SIPL is not relevant and the Petitioner was ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver put to notice before March 1, 2013; Even otherwise, the letter dated March 7, 2013 was an intimation and was neither initiation of audit nor communication of audit objection; Even assuming that it was an intimation of audit objection, yet communication on March 7, 2013 was much after cut-off date. Therefore, the Order rejecting VCES to the Petitioner was set aside and the matter w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as remanded back for fresh consideration. Hope the information will assist you in your Professional endeavors. In case of any query/ information, please do not hesitate to write back to us. Thanks and Best Regards, Bimal Jain FCA, FCS, LLB, B.Com (Hons) Delhi: Flat No. 34B, Ground Floor, Pocket - 1, Mayur Vihar, Phase - I, Delhi - 110091, India Desktel: +91-11-2275 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7595/ 42427056 Mobile: +91 9810604563 Chandigarh: H. No. 908, Sector 12-A, Panchkula, Haryana - 134115 Kolkata: Ist Floor, 10 R G Kar Road Shyambazar, Kolkata - 700 004 Email: [email protected] Web: www.a2ztaxcorp.com Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professional advice or recommend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of firm. Neither the authors nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon. Readers are advised to consult the professional for understanding applicability of this newsletter in the respective scenarios. While due care has been taken in preparing this d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocument, the existence of mistakes and omissions herein is not ruled out. No part of this document should be distributed or copied (except for personal, non-commercial use) without our written permission. - - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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