ST - VCES, 2013 - Section 110 is a standalone section and makes no reference to Section 107(4) of FA, 2013 - applicability of s. 110 is required to be examined independently: CESTAT
By TIOL News Service
NEW DELHI, APRIL 23, 2018: THE appellant filed an application in Form VCES-1with the Designated Authority on December 23, 2013 declaring under tax dues of Rs.32,45,200/- for the period October 2007 to December 2012 and as mandated, 50% of the dues were deposited before December 31, 2013.
As per the scheme, the appellant was required to deposit the balance amount to the credit of the Government on or before December 31, 2014.
However, on the ground of alleged financial constrains, the appellant did not deposit the balance dues by the deadline date and approached the Designated Authority to allow some more time to make the balance payment. There was no response to the said letter. Subsequently, the appellant deposited the balance payment on 28/02/2015 and October and November 2015.
An order came to be passed rejecting the application under the said ST VCES scheme and directing the appellant to discharge their tax liabilities alongwith interest and penalty.
This order was appealed before Commissioner (Appeals) who, by relying upon the Kerala High Court decision in Kasmisons Builders (P) Ltd. vs. Assistant Commissioner, Service Tax Division, Kochi - 2016-TIOL-1121-HC-KER-ST rejected the appeal. The High Court had held –
| ST - VCES, 2013 is an Amnesty scheme - To allow the petitioner to effect payments belatedly would tantamount to altering the terms of the settlement and that cannot be done by the High Court – Petition dismissed [para 4] |
Hence, the present appeal before CESTAT.
The appellant referred to section 110 of the FA, 2013 and it reads –
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Tax dues declared but not paid.
110. Where the declarant fails to pay the tax dues, either fully or in part, as declared by him, such dues along with interest thereon shall be recovered under the provisions of section 87 of the Chapter.
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It is emphasized that the said section was not the subject matter of the Kerala High Court decision (supra) relied upon by the Commissioner(A).
The Bench, therefore, observed –
++ though Commissioner (Appeals) has referred to the said section, but has simpliciter observed that a conjoint reading of Section 107(4) of the Finance Act, 2013 read with Section 110 of the Act reveals that an assessee opting for the VCES, 2013 must pay the whole of admitted tax liability by 31 st December, 2014, alongwith interest and if he has failed to pay whole or part of the declared tax by 31 st December, 2014, he cannot claim the benefit under VCES, 2013.
++ i note that Section 110 is a stan dalone section and makes no reference to Section 107(4) which only deals with a situation of non-payment of dues from 01/07/2014 to 31/12/2014. Section 110 deals with the situation where there is no payment even after 31/12/2014. As such, I am of the view that the applicability of the said Section 110 is required to be examined independently by the lower authorities, for which the matter is being remanded for re-consideration.
The appeal was allowed by way of remand.
Quick reference: Sub-section (4) of section 107 [ Procedure for making declaration and payment of tax dues ] of the Finance Act, 2013 reads -
(4) The tax dues or part thereof remaining to be paid after the payment made under sub- section (3) shall be paid by the declarant on or before the 30th day of June, 2014:
Provided that where the declarant fails to pay 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 thereon, at such rate as is fixed under section 75 or, as the case may be, section 73B of the Chapter for the period of delay starting from the 1st day of July, 2014.
(See 2018-TIOL-1290-CESTAT-DEL)
