Voluntary compliance scheme finality bars reassessment unless false declaration procedure and limitation are strictly followed.

A declaration accepted under the Voluntary Compliance Encouragement Scheme, 2013, followed by payment of the declared dues and issue of a discharge certificate in Form VCES-3, gives finality to the liability covered by the declaration and grants immunity from further penalty, interest and proceedings, subject only to the scheme's false-declaration exception. Where the scheme permits reopening for a substantially false declaration, the authority must record reasons and serve notice within one year from the declaration; absent that procedure and limitation compliance, the matter cannot be re-opened. The note also records that, on these facts, the demand and consequential bank account attachment were set aside.

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Issues: (i) Whether proceedings under the Finance Act, 1994 could be continued and an order of demand sustained after the declarant had obtained discharge under the Voluntary Compliance Encouragement Scheme, 2013. (ii) Whether the respondents could rely on an alleged false declaration under the scheme without taking action in the manner and within the time prescribed by the scheme.

Issue (i): Whether proceedings under the Finance Act, 1994 could be continued and an order of demand sustained after the declarant had obtained discharge under the Voluntary Compliance Encouragement Scheme, 2013.

Analysis: The declaration made under the scheme was accepted, the balance tax dues were paid, and a discharge certificate in Form VCES-3 was issued. Under paragraph 108 of the scheme, payment of the declared tax dues with interest entitled the declarant to immunity from penalty, interest and other proceedings, and the declaration became conclusive upon issuance of the discharge certificate, subject only to paragraph 111.

Conclusion: The demand proceedings could not legally survive after issuance of the discharge certificate, and the impugned demand order was unenforceable.

Issue (ii): Whether the respondents could rely on an alleged false declaration under the scheme without taking action in the manner and within the time prescribed by the scheme.

Analysis: Paragraph 111 of the scheme permits action on the basis of a substantially false declaration only where reasons are recorded and a notice is served within one year from the date of declaration. No such procedure was followed, and the statutory time limit had expired. In the absence of any recorded reasons or timely notice, the respondents could not later reopen the matter on the ground of alleged false disclosure.

Conclusion: The respondents were not entitled to invoke the false-declaration exception, and the challenge to the discharge was unsustainable.

Final Conclusion: The impugned demand and consequential bank account attachment were set aside, and the writ petition succeeded.

Ratio Decidendi: Where a declaration under the Voluntary Compliance Encouragement Scheme, 2013 is accepted and a discharge certificate is issued, the liability covered by the declaration attains finality and cannot be reopened except in strict compliance with the scheme's false-declaration procedure and limitation period.

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