Voluntary compliance scheme declarations cannot be split or independently recomputed absent express statutory authority.

Under the Service Tax Voluntary Compliance Encouragement Scheme, 2013, the Designated Authority could not bifurcate a declaration, compare parts of the declared dues with ST-3 returns, or independently recompute liability unless the scheme expressly permitted that exercise. The scheme disqualified a declarant only where the return for the relevant period had already disclosed the true liability and the tax remained unpaid. As no provision in the scheme or the Finance Act authorised partial rejection on a split computation, the impugned rejection was held to be without authority of law. The declaration was directed to be reconsidered afresh under the scheme and rules, with merits left open.

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Issues: Whether the Designated Authority could partly reject a declaration under the Service Tax Voluntary Compliance Encouragement Scheme, 2013 by bifurcating the declared tax dues and comparing them with ST-3 returns; and whether the impugned rejection was within the authority conferred by Section 106(1) of the Finance Act, 1994.

Analysis: The declaration covered the relevant period under the scheme and the authority proceeded to examine annexures and ST-3 returns to conclude that the dues had already been disclosed, and then to segregate the declaration by preparing its own comparative tables. The scheme permits declaration of tax dues and disqualifies a person only where the return for the relevant period had already disclosed the true liability and the tax remained unpaid. No provision in the scheme or the Finance Act authorized the Designated Authority to split the declaration, compute liability in parts, or reject the declaration on the basis of an exercise of bifurcation not found in the statutory framework. The authority therefore travelled beyond the power contemplated by the scheme and the enabling provision.

Conclusion: The rejection of the declaration was without authority of law and could not be sustained. The declaration was required to be reconsidered and dealt with under the scheme and the rules.

Final Conclusion: The writ petition succeeded, the impugned order was quashed, and the declaration was left to be processed afresh in accordance with the scheme and the rules, with all merits kept open.

Ratio Decidendi: In the absence of an express enabling provision, the Designated Authority under a voluntary compliance scheme cannot bifurcate a declaration or independently recompute tax dues to reject eligibility; the declaration must be tested only within the limits of the statutory scheme.

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