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TMI Blog2015 (11) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... of the petitioner to the fact that it could avail of the benefit of the Scheme. However, well within the time limit prescribed under the Scheme, the petitioner in due compliance with the provisions of the section 107 of the Act, submitted a declaration under sub-section (1) thereof and paid more than fifty per cent of the tax dues before 31st December, 2013 as required under sub-section (3) thereof and in order to comply with the provisions of sub-section (4), viz. payment of the remaining amount, requested for adjustment of an amount of 6,36,103/- paid under the wrong accounting code of interest and penalty to the correct code of service tax, which request was duly acceded to by the respondent authorities and such correction was made before 30th May, 2014. When the entire amount as contemplated under the Scheme stood paid before the due date and the petitioner satisfied all other requirements under the Scheme, the respondents are not justified in denying the benefit of the Scheme to the petitioner only on the ground that the amount of 6,36,103/- had initially been paid towards the interest and penalty. The impugned communication/order which seeks to deny the benefit of the Scheme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iance Encouragement Scheme, 2013 (hereinafter referred to as "the VCES") as Chapter VI of the Finance Act, 1994 vide Finance Act, 2013. The Service Tax Voluntary Compliance Encouragement Rules, 2013 (hereinafter referred to as "the rules") came to be notified vide notification dated 13.05.2013. The rules prescribed the form and manner of declaration, form and manner of acknowledgment of declaration, manner of payment of tax dues and form and manner of issuing acknowledgment of discharge of tax dues under the VCES. 6. It is the case of the petitioner, a proprietary firm, that it did not have any knowledge of the service tax law and had been regularly filing ST-3 returns and paying service tax as per its understanding. Therefore, the petitioner had agreed with the four revenue paras raised in the audit report and paid the amount as suggested by the audit officials. However, during the course of audit, the petitioner was not informed by the audit officials regarding the option of availing the benefit of VCES. 7. The petitioner did not agree with the revenue para in audit report demanding ₹ 12,97,785/- for the period 2008-09 to 2010-11, since the service rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment of 50% of the declared tax dues on or before 31.12.2013. By a letter dated 14.05.2014, the petitioner requested the third respondent for change in the accounting code of penalty and interest. The Assistant Commissioner of Service Tax, Ahmedabad, by a letter dated 21.05.2014, requested the e-Pay and Accounts Office, Service Tax, Mumbai to rectify the wrong accounting head selected by the petitioner for payment of service tax and change the accounting code of above paid interest and penalty to service tax. By a communication dated 30.05.2014, the e-Pay and Accounts Office, Service Tax, Mumbai informed the Assistant Commissioner of Service Tax, Ahmedabad regarding the correction of accounting head of interest and penalty to service tax. Thus, a total amount of ₹ 6,84,203/- came to be corrected from the accounting code of interest and penalty to service tax. The petitioner, by a communication dated 30.06.2014, informed the third respondent regarding final payment of tax dues declared under VCES. The third respondent by a letter dated 13.08.2014, called upon the petitioner to clarify as to how the amount of ₹ 48,100/- paid in respect of penalty for late filing of ST- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he reason of not fulfilling the conditions of sub-section (4) of section 107 of the Finance Act, 2013 and consequently the declared amount of ₹ 6,36,103 was liable to be recovered from the petitioner under the provisions of section 87 of the chapter as specified in section 110 of Finance Act, 2013 without immunity, that is, penalty and interest which was otherwise available under section 108 of the Finance Act, 2013 in respect of total tax dues of ₹ 20,63,597/- declared under VCES-1. Being aggrieved, the petitioner has filed the present petition. 11. Mr. Jigar Shah, learned advocate for Mr. Anand Nainawati, learned advocate for the petitioner assailed the impugned order by submitting that at the relevant time when the petitioner paid the amount towards four revenue paras together with interest and penalty, the petitioner was not aware of the existence of the scheme. It was contended that it was the duty of the concerned official to inform the petitioner about the existence of the scheme so as to enable the petitioner to avail of the benefit thereof. It was submitted that the petitioner has satisfied all the requirements of the scheme, the only reason why the benefit un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see's own mistake or otherwise, the Commissioner has the power to correct such an assessment under section 264(1) of the Act. If the Commissioner refuses to give relief to the assessee, in such circumstances, he would be acting dehors the powers under the Act and the provisions of the Act and therefore, is duty bound to give relief to an assessee, where due, in accordance with the provisions of the Act. 19. In the present case, the respondent Commissioner has no where stated that the petitioner is not entitled to the relief under section 10(10C) of the Act. In fact, the said position is undisputed. The assessing officer himself had passed an order under section 154 of the Act, granting such relief. In the circumstances, even the order under section 264 of the Act made on 29th March 2004, cannot be sustained. 20. A word of caution. The authorities under the Act are under an obligation to act in accordance with law. Tax can be collected only as provided under the Act. If an assessee, under a mistake, misconception or on not being properly instructed, is over-assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 70/5/2013-ST dated 8th August, 2013, it has been clarified that if the declarant fails to pay at least 50% of declared amount of tax dues by 31st December, 2013, he would not be eligible to avail of the benefit of the scheme. Accordingly, on the same analogy, if the remaining amount is not paid upto 30.06.2014 without interest or upto 31.12.2014 with interest, the declarant would not be eligible to avail of the benefit of the scheme. It was submitted that in the present case, as the petitioner had not paid the entire amount of ₹ 20,63,597/- within the time stipulated under the scheme, it was not entitled to avail of the benefit of the scheme. It was submitted that the Designated Authority (VCES Cell) has duly considered all the aspects of the matter and after due consideration, has come to the conclusion that the petitioner is not eligible for the benefit of the scheme, under the circumstances, there is no warrant for interference by this court. 13. The controversy involved in the present case relates to the question as to whether in the facts and circumstances of the present case, the petitioner can be said to have paid the entire tax dues declared amounting to ₹ 20,6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment issued to him under subsection (2). Sub-section (7) of section 107 provides that on furnishing the details of full payment of declared tax dues and the interest, if any, payable under the proviso to sub-section (4), the designated authority shall issue an acknowledgment of discharge of such dues to the declarant in such form and in such manner as may be prescribed. Under section 108 of the Act, 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. Sub-section (2) thereof provides that subject to the provisions of section 111, a declaration made under subsection (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. 16. In the present case, the total amount payable by the petitioner in relation to the tax dues declared under the Scheme is ₹ 20,63, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compliance of which is not disputed inasmuch as the petitioner had deposited an amount of ₹ 14,27,494/- pursuant to the declaration filed under the scheme. Under sub-section (4) of section 107 of the Act, the remaining part of the tax dues has to be paid by the declarant on or before 30th June, 2014 which also stood paid before 30th May, 2014, in view of the adjustment of the amount paid under the wrong accounting code to the correct accounting code of service tax. Therefore, before the 30th day of June, 2014, the total amount declared under the Scheme stood duly paid by the petitioner. However, the respondents have sought to deny the benefit of the Scheme to the petitioner under the specious plea that the amount of ₹ 6,36,103/- had been paid initially under the head of interest and penalty and therefore, the same could not be considered as payment towards service tax, which cannot be countenanced. The respondent authorities cannot be permitted to deny the benefit of the Scheme to the petitioner by taking shelter behind a hyper-technical plea. When such a beneficial Scheme is introduced the respondent authorities in all fairness should inform assessees about the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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