By TIOL News Service

MUMBAI, MAR 20, 2018: THE petitioner had filed a VCES-1 declaration application dated 07.08.2013 for Rs.48,28,491/- which was further revised to Rs.56,51,696/- on 03.09.2013. They paid an amount of Rs.29,00,000/- by 31.12.2013 and the balance of Rs.27,51,696/- along with interest of Rs.2,65,169/- was paid under various challans, the last two challans totalling an amount of Rs.12,90,354/- being of date 02.01.2015.

Inasmuch as since the applicant had not paid the amount as mandated by section 107 of the FA, 2013, by 31 st December 2014, the designated authority issued a letter dated 29 December 2016 informing that the declaration filed by them is not eligible for the benefit of the VCES, 2013 scheme and the full tax dues be paid by them along with interest failing which action would be initiated u/s 110 of the FA, 2013 for recovery of government dues u/s 87 of the FA, 1994.

The petitioners are, therefore, before the Bombay High Court seeking quashing and setting aside of the said letter. It is submitted that the delay occurred due to some miscalculation and clerical mistake so also miscommunication between the Chartered Accountant and the petitioners; that payment was made within two days from the alleged due date, namely, 31st December, 2014; that the delay be condoned.

The counsel for the Revenue supported the letter of the designated authority and submitted that the petitioners cannot insist on the delay being condoned because the scheme is not open ended; that the cases relied upon by the petitioners were distinguishable on facts.

After considering the submissions made, the High Court narrated the provisions of the VCES, 2013 contained in the Finance Act, 2013 and observed –

++ We are of the firm view that this is not an open ended scheme. The benefits thereunder cannot be derived dehors the scheme or after its life or duration has come to an end.

++ The relaxation or concession, which can be granted in terms of the scheme have been outlined in the scheme itself and particularly by sub-section (4) of section 107.

++ It is not the intent that the tax dues for the period 1st October, 2007 and ending on 31st December, 2012 and the liability in that behalf can be discharged in the manner chosen by the assessee or as per his whims and fancies.

++ Equally, the Revenue and its department cannot, by its whims and fancies, allow any defaulter to pay the taxes after the due date is over long time back. The plain duty of the departmental officials is to assess the tax payable and within the period prescribed by the statute.

++ Any such scheme would not enable the authorities to extend the period of compliance stipulated by law and defer the tax liability indefinitely. It is not expected of them to show undue favour dehors the statute.

++ The petitioners knew their tax liability in advance. They knew that there was already relaxation/extension granted. Those who have not cleared the tax liability by the end of June, 2014 got one more opportunity and they had to make the payment on or before 31st December, 2014.

++ They made some payment after availing of the relaxation and by further relaxation, which was available till 31st December, 2014, they definitely could have made the deposit. How there could be a miscommunication is, therefore, not clear at all. The reason now assigned and in the memo of the petition is clearly an afterthought.

++ We are in respectful agreement with the High Court of Jharkhand [Manpreet Engineering & Construction Co. - 2016-TIOL-1456-HC-JHARKHAND-ST (and which has also been not interfered with after rejection of the Special Leave Petition) that when this is the nature of the stipulations in the scheme, any view taken contrary to the same would be rewriting the scheme itself or prescribing conditions which are not specifically imposed.

++ We are of the view that the petitioners have to blame themselves and they cannot take advantage of their own wrong and force the respondents to accept the further sums in full and final settlement contrary to the stipulations and provisions in the scheme.

The writ petition was dismissed.

(See 2018-TIOL-477-HC-MUM-ST)