Court dismisses challenge to tax scheme, clarifies benefits period. Appeal remedy available.

The Court rejected the challenge to the Show Cause Notice and Order-in-original under the VCES Scheme 2013, holding that the Scheme's benefits did not extend to the period post-December 2012. The petitioner's tax liability declaration and payment under the Scheme covered only up to December 2012, and the subsequent period's liability was determined separately. The Court emphasized the availability of an appeal remedy before the Appellate Tribunal and dismissed the Writ Petition, directing the petitioner to pursue the appeal route.

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Issues:
Challenge to Show Cause Notice and Order-in-original under Service Tax Voluntary Compliance Encouragement Scheme, 2013 (VCES Scheme 2013).

Analysis:
The petitioner, a company engaged in rendering taxable services, filed a Writ Petition against a Show Cause Notice dated 13.10.2014 calling for Service Tax, interest, and penalty for services provided from 01.01.2013 to 31.12.2013. The petitioner claimed immunity from penalty under the VCES Scheme 2013, having disclosed and paid its Service Tax liability up to December 2012 under the Scheme. The impugned notice and subsequent order were challenged on the grounds of the VCES Scheme's applicability and the alleged immunity from penalty.

The respondent, represented by the Revenue Counsel, argued that the impugned notice and order were for the period post-December 2012, not covered by the VCES Scheme availed by the petitioner. The Order-in-original dated 10.10.2017 highlighted the petitioner's admission of Service Tax liability only up to December 2012, and the subsequent notice and order pertained to the period from January 2013 onwards. The Revenue Counsel emphasized the petitioner's collection of Service Tax but failure to remit it to the government, along with non-filing of ST3 returns during the relevant period.

The Court, after considering the arguments, found in favor of the Revenue's position. It held that the VCES Scheme's benefits did not extend to the period post-December 2012, for which the petitioner had already declared and paid its Service Tax liability. The Scheme's applicability was limited to the past period, and the subsequent period's tax liability was determined by the taxable events occurring post-December 2012. Therefore, the Court rejected the challenge to the Show Cause Notice and Order-in-original based on the VCES Scheme's immunity from penalty.

The Court also noted that the impugned order was appealable before the Appellate Tribunal under Section 86 of the Finance Act, 1994. It emphasized the availability of an alternative remedy for the petitioner to challenge the order on its merits, thereby declining to exercise its extraordinary jurisdiction under Article 226 of the Constitution of India. Consequently, the Writ Petition was dismissed, and the Court directed the petitioner to pursue the appeal remedy before the Appellate Tribunal.

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