VCES declaration barred by prior show-cause notice on the same issue for an earlier period, under the statutory embargo.

A VCES declaration is barred where a prior show-cause notice has already been issued to the same person on the same issue for an earlier period, and the later declaration concerns a subsequent period on that same issue. The second proviso to section 106(1) of the Finance Act, 2013 creates a statutory embargo in such circumstances, so the declaration cannot be accepted. On the facts stated, the earlier notice and the declaration both related to security agency services and the same tax issue, making the later period ineligible under the scheme and supporting rejection of the declaration.

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Issues: Whether the appellant's declaration under the Voluntary Compliance Encouragement Scheme was barred by the proviso to section 106(1) of the Finance Act, 2013 because an earlier show-cause notice had already been issued on the same issue for an earlier period.

Analysis: The declaration covered service tax dues for security agency services for a later period, while a prior show-cause notice had already been issued for the same service and the same issue for an earlier period. The second proviso to section 106(1) prohibited a declaration where a notice or determination order had been issued to a person in respect of any period on any issue, for any subsequent period on the same issue. On the facts found, the earlier notice and the VCES declaration related to the same taxable service and the same issue, and the later period was hit by the statutory embargo.

Conclusion: The rejection of the VCES declaration was held to be valid, and the appeal was dismissed.

Ratio Decidendi: Where a prior notice has been issued on the same issue, the second proviso to section 106(1) of the Finance Act, 2013 bars a VCES declaration for any subsequent period on that same issue.

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