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TMI Blog2016 (3) TMI 351X X X X Extracts X X X X X X X X Extracts X X X X ..... t by its observations cannot enlarge the time frame as has been done in the instant case. Rather non-payment of 50% of the declared tax dues or other dues under section 107(3) empowers the service tax authority to proceed under section 87 and also under section 89 of the Act, which in the instant case has been initiated. - Decided in favor of revenue. - M.A.T. No. 1122 of 2014 with C.A.N. No. 7087 of 2014 - - - Dated:- 7-8-2015 - Soumitra Pal And Mir Dara Sheko, JJ. For the Appellant : Mr S S Banerjee Mr K K Maiti For the Respondent : Mr Mainak Bose, Mr Paritosh Sinha, Mr Amitava Mitra, Ms Dolan Dasgupta, Mr Pramit Bag ORDER Soumitra Pal, J. This appeal has been preferred by the Commissioner of Service Tax Commissionerate, Kolkata challenging the judgment dated 3rd April, 2014 passed in W.P. 10245(W) of 2014 (ParijatVyappar Private Ltd. and Anr. -vs- Union of India and Ors.). It appears that the writ petitioner no. 1, a company incorporated under the Companies Act, 1956, having service tax registration under Chapter V of Finance Act, 1994 and the petitioner no. 2, a director of the petitioner no. 1, moved a writ petition affirmed on 31st March, 2014 up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r challenge, the relevant portion of which is set out hereunder : At the time of moving the writ petition a point of law arose relating the interpretation of Section 107 and Section 110 of the Service Tax Voluntary Compliance Encouragement Scheme, 2013 and the respective Advocates have addressed the Court on the point of law. Since the facts are not disputed, this Court proceeded to decide the writ petition on the question of law agitated by the respective counsels. *** *** *** *** ** My endeavour has failed to find out from the provision of the said scheme that once a default is committed for non-compliance of the provisions contained therein relating to the deposit, the declarant shall be thrown outside the ambit of the said scheme and shall be thrown in the pool of chapter containing the service tax. Section 110 of the said Act clearly indicates that in the event of the default of the payment either fully or in part, the balance amount would be recovered by taking recourse to Section 87 of the Finance Act. It is tried to be contended by the respondent that Section 102 which contemplates for removal of doubts makes it abundantly clear that the immunity provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or before the 31st day of December, 2013 pay not less than fifty per cent of the tax dues so declared under section 107(1) and submit proof of such payment to the designated authority. Section 107(4) stipulates that the tax dues or part thereof remaining to be paid after payment made under subsection (3) shall be paid by the declarant on or before the 30th day of June, 2014 provided where the declarant fails to pay the said tax dues or part thereof on or before the said date, he shall pay the same on or before the 31st day of December 2014 along with interest. It was submitted by Mr. S.S. Banerjee, learned advocate for the appellant that the learned Judge while passing the judgment under challenge failed toappreciate that if a person failed to pay 50% of the declared amount, he could not come under VCES and the authorities are free to take action under the provisions of the Finance Act, 1994. Therefore, the direction of the learned Single Judge that the authorities can take action under section 87 of the Act is contrary to law. Submission was the learned Judge failed to appreciate that though the respondents herein declared their service tax liability, however, as they failed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the writ petition was filed. Submission was since entire dues have been paid, though beyond the time fixed under the VCES, the issue is now academic and no order may be passed in appeal. Admittedly, the respondent nos. 1 and 2 made a declaration in VCES Form I declaring that a sum of ₹ 11,49,32,357/- was due as service tax and intended to make payment of 50% of the dues under VCES. However, by letter dated 24th December, 2014, the writ petitioners had indicated the manner in which the tax dues were to be paid and also prayed for adjustment with the income tax refund which, as evident from the letter dated 26th December, 2013, was rejected by the service tax authorities. The question is, whether the respondent nos. 1 and 2 were entitled under VCES to seek adjustment of service tax dues against the income tax refund. In our view, the question is to be answered in negative as section 107(3) of the VCES postulates that The declarant shall, on or before the 31st day of December, 2013, pay not less than fifty per cent of the tax dues so declared under sub-section (1) and submit proof of such payment to the designated authority . Therefore, under the VCES, payment of 50% o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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