Court quashes order on service tax, petitioner's payment verified, eligible for scheme benefits.

The court quashed the order rejecting the petitioner's declaration on service tax payment, finding that the petitioner had indeed paid Rs. 6 lacs in service tax. The court determined the outstanding amount to be only Rs. 8,737, making the petitioner eligible for scheme benefits. The revenue was directed to verify the payment and issue a certificate accordingly. The petition was allowed, and the rule was made absolute without costs.

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Issues:
Petition to quash order rejecting declaration on service tax payment.

Analysis:
The petitioner filed a petition under Articles 226 and 227 to challenge the order rejecting their declaration regarding the payment of service tax. The petitioner, appointed as a Direct Sales Agent for a bank, faced issues regarding the responsibility for paying service tax. Despite being unable to collect service tax from the bank, the petitioner paid Rs. 6 lacs in service tax through challans. The tax department issued a show cause notice demanding the same amount, ignoring the payment made by the petitioner. The petitioner applied under the Dispute Resolution Scheme, stating the outstanding amount was only Rs. 8,737 after the Rs. 6 lacs payment. However, the application was rejected, alleging false particulars in the declaration.

The petitioner argued that the balance sheet clearly showed the Rs. 6 lacs liability, with payments made on different dates supported by six challans. The petitioner contended that the rejection was unjust as the particulars were true and supported by evidence. The revenue's counsel claimed the rejection was due to the unavailability of challans and discrepancies between the balance sheet and the application. The revenue requested the production of challans for verification.

After considering the arguments and documents, the court found that the petitioner had indeed paid Rs. 6 lacs, supported by bank entries and receipted challans. Consequently, the outstanding amount was only Rs. 8,737, making the petitioner eligible for the scheme benefits. The court quashed the impugned order, directing the revenue to verify the Rs. 6 lacs payment and issue a certificate accordingly. The petition was allowed, and the rule was made absolute without costs.

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