Strict construction of amnesty scheme bar allowed declaration for a distinct tax period despite pending proceedings for another period.

The Delhi HC held that a declaration under the Service Tax Voluntary Compliance Encouragement Scheme could not be rejected merely because proceedings for a different past period were pending before the Tribunal. The second proviso to section 106 was treated as a strict exception and applied only where a notice or order of determination existed for the same issue in the same subsequent period. Because the declaration concerned a distinct period and a different factual and exemption context, the bar did not apply. The rejection was set aside and the declaration had to be considered under the Scheme.

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Issues: Whether the rejection of the declarant's application under the Service Tax Voluntary Compliance Encouragement Scheme, 2013 was justified on the ground that proceedings on a different past period were pending before the Tribunal, and whether the second proviso to section 106 barred the declaration for the subsequent period in dispute.

Analysis: The Scheme was intended to provide a one-time amnesty to service tax defaulters who satisfied its conditions, including payment of the prescribed percentage of tax dues within time. The second proviso to section 106 operates as an exception and must be construed strictly. Its bar applies only where a notice or order of determination has been issued in respect of the same issue for a subsequent period. A pending dispute relating to a different period, based on different facts and an earlier exemption regime, does not by itself disqualify a declarant if the declaration concerns a distinct subsequent period not already pending or determined.

Conclusion: The rejection of the declaration was and unsustainable; the declarant was entitled to have its application processed under the Scheme.

Final Conclusion: The impugned order was set aside and the authorities were directed to consider the petitioner's declaration in accordance with law, resulting in relief to the assessee.

Ratio Decidendi: A proviso barring declarations under an amnesty scheme must be narrowly construed and applies only when the same issue for the same liability period is already the subject of pending or determined proceedings.

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