VCES declaration rejection: appeal lies before Tribunal, but cheque delivery alone is not timely tax payment.

The commentary explains that an appeal was maintainable before the Tribunal against rejection of a declaration under the Voluntary Compliance Encouragement Scheme, 2013, because the scheme did not exclude appellate jurisdiction under the Finance Act, 1994. It further states that tax dues under the scheme were paid only when the prescribed mode was completed in accordance with the rules and supported by proof of payment. Mere handing over of a cheque to the department did not satisfy the requirement, since payment was treated as complete only on presentation and realisation through the designated bank. The rejection of the declaration was therefore upheld.

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Issues: (i) Whether an appeal lies before the Tribunal against rejection of a declaration under the Voluntary Compliance Encouragement Scheme, 2013. (ii) Whether payment made by cheque to the department satisfied the requirement of payment of tax dues under the scheme within time.

Issue (i): Whether an appeal lies before the Tribunal against rejection of a declaration under the Voluntary Compliance Encouragement Scheme, 2013.

Analysis: The appealability of proceedings under the scheme was examined with reference to the appellate framework under the Finance Act, 1994. It was held that the scheme-related rejection was contestable before the Tribunal and that the absence of a specific reference in the scheme did not by itself exclude appellate jurisdiction.

Conclusion: The issue was answered in the affirmative and maintainability was upheld.

Issue (ii): Whether payment made by cheque to the department satisfied the requirement of payment of tax dues under the scheme within time.

Analysis: The scheme required payment of not less than fifty per cent of the declared tax dues to the credit of the Central Government in the manner prescribed. The governing rule deemed payment by cheque only when the cheque was presented to the designated bank and realised, and not merely when handed over to the department. The statutory language also required proof of payment to be submitted, indicating that the actual payment had to be completed in the prescribed manner within the stipulated period.

Conclusion: The requirement was not satisfied by handing over the cheque to the department, and the rejection of the declaration was in law.

Final Conclusion: The Tribunal upheld the rejection of the declaration and declined to interfere with the order under challenge, leaving the revenue's stand undisturbed.

Ratio Decidendi: Under the scheme, tax dues are paid only when the prescribed mode of payment is completed in accordance with the rules and supported by proof of payment; mere delivery of a cheque to the department does not constitute timely payment.

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