TaxTMI 
TaxTMI 
2016 (3) TMI 351
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....td. and Anr. -vs- Union of India and Ors.). It appears that the writ petitioner no. 1, a company incorporated under the Companies Act, 1956, having service tax registration under Chapter V of Finance Act, 1994 and the petitioner no. 2, a director of the petitioner no. 1, moved a writ petition affirmed on 31st March, 2014 upon notice to the appellant herein. Prayers in the writ petition, relevant for consideration, are as under: "(a) A writ and/or in the nature of Mandamus be issued commanding the respondents, their men, servants, agents or assigns to forthwith :- (i) Quash, rescind, recall, set aside, cancel and/or revoke the impugned Authorization of Arrest dated January 17, 2014; (ii) Refrain from giving any effect and/or further....
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....e respondents, their men, agents, servants and assigns from giving any effect and/or further effect and/or taking any steps or further steps pursuant to the declaration given by the petitioner under the Scheme of 20132 and in directing the respondent No. 3 to accept all payment made by the petitioner towards the declaration of tax dues as payment under the Scheme of 2013." The writ petition was moved and disposed of by the judgment under challenge, the relevant portion of which is set out hereunder : "At the time of moving the writ petition a point of law arose relating the interpretation of Section 107 and Section 110 of the Service Tax Voluntary Compliance Encouragement Scheme, 2013 and the respective Advocates have addressed the Court....
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....benefit under the scheme is provided to a person against whom no enquiry or investigation or other proceeding are initiated. Section 106 of the said Act makes the position clear and, therefore, the person who voluntarily declare his liability to pay service tax, if commits defaults in complying the provisions contained under the said scheme, the authorities are bound to take action under the provisions which provides for the steps to be taken for non-compliance of any of the provisions of the said scheme. To sum up, this Court must conclude that the proviso is applicable only in respect of Sub-section (4) of Section 107 and cannot be stretched to Subsection (3) of Section 107. The authorities can take recourse under Section 110 of the sa....
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....he shall pay the same on or before the 31st day of December 2014 along with interest. It was submitted by Mr. S.S. Banerjee, learned advocate for the appellant that the learned Judge while passing the judgment under challenge failed toappreciate that if a person failed to pay 50% of the declared amount, he could not come under VCES and the authorities are free to take action under the provisions of the Finance Act, 1994. Therefore, the direction of the learned Single Judge that the authorities can take action under section 87 of the Act is contrary to law. Submission was the learned Judge failed to appreciate that though the respondents herein declared their service tax liability, however, as they failed to pay 50% of the declared amount w....
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....he writ petitioners to pay the tax dues under the VCES shows that the prayer of the writ petitioners was rejected before the expiry of the of the VCES. Moreover, the letter dated 26th December, 2013 has gone unchallenged. Therefore, it was submitted that as the writ petition is without substance, the appeal may be allowed setting aside the impugned order. Mr. Mainak Bose, learned advocate for the respondent nos. 1 and 2/writ petitioners submitted that as prosecution was pending against the writ petitioners, they had filed a declaration under VCES Form I declaring to pay 50% of the tax dues and the department had issued VCES Form II acknowledging the filing of the declaration under VCES Form I. However, as the prayer for adjustment the tax ....
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....hey are not entitled to the benefits under VCES. The argument of Mr. Bose that the appellant by issuing VCES Form II had accepted the mode and manner of payment of tax due cannot be accepted as nothing is on record from which it can be inferred that the service tax authority had accepted the declaration of the petitioners. Rather the service tax authorities, as noted, by letter dated 26th December, 2013 had rejected the prayer of the writ petitioners for adjustment with the Income Tax dues which has not been challenged in the writ petition. We find that though the learned Single Judge in the judgement impugned had at the outset held that "the facts are not disputed", however, these vital aspects were ignored. Since admittedly 50% of the dec....