TaxTMI 
TaxTMI 
2024 (8) TMI 1562
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....false, therefore I reject the said declaration and order to withdraw the immunity granted to him under Section HON'BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL) HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) 108 of the Finance Act-2013 against the VCES declaration dated 24.12.2013. (ii) I reduce the demand of Rs. 37,00,432/- proposed in the Show cause notice by Rs.16,34,960/- for adjustment of advances standing at the beginning of the financial year, and, order to demand and recover Service Tax along with Education Cess and S.& Higher Ed. Cess amounting to Rs. 20,65,472/- (Rupees Twenty Lacs Sixty Five Thousand Four Hundred and Seventy Two only) from Shri Uday Veer Singh against Real Estate Agent Services provided by him during the period April 2009 to March 2013 under the provisions of sub- section (1) of the Section 73 read with Section 111(1) of the Finance Act, 2013 amended. (iii) I order to demand and recover a sum of Rs. 1,01,347/- Rupees One Lac One Thousand Three Hundred Forty Seven only) collected by Shri Uday Veer Singh from his clients but not paid to the exchequer and written off by him during the F. Year 2010-11 from Shri Uday Veer Singh under Section ....
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....was of view that during April' 2009 to March' 2013, appellant had to pay Service Tax on taxable value of services amounting to Rs 8,90,37,974/- rendered by his two proprietorship concerns whereas he had paid Service Tax only against the taxable value of services amounting to Rs.5,43,02,657/-; thus during the aforesaid period he appears to have short paid Service Tax along with education Cess and S.& Higher Ed. Cess amounting to Rs. 37,00,430/-, on the suppressed value of Taxable services amounting to Rs. 3,47,35,317/-. 2.3 Appellant had written off Rs. 1,01,347/- collected as Service Tax, in his books of accounts for the F.Y. 2010-11, which was also required to be paid by them under Section 73A(1) of Finance Act,1994. 2.4 They opted for VCES Scheme to pay their aforesaid service tax liability and M/s Jyoti Syndicate filed VCES application in Form VCES-1 dated 24.12.2013 for the period April' 2011 to September' 2012 declaring value of services Rs. 1,10,63,198/- and applicable Service Tax dues Rs. 11,52,802/-. Out of Total Service Tax dues Rs. 11,52,802/- declared by Shri Uday Veer Singh, Proprietor M/s Jyoti Syndicate Rs. 536714/- was deposited vide challan dat....
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....vice Tax' Rules, 1994, read with the provisions of Section 68 of Finance Act-1994 & Section 111 of the Finance Act 2013, as amended 2. Clauses(b) (c) and (e) of section 77(1) of Finance Act 1994 and, 3. Rule 7C of Service Tax Rules-1994. 27. In terms of Section 111(3) of the Finance Act-2013 this show cause notice shall be deemed to have been issued under Section 73 and the provisions of Chapter V of the Finance Act-1994 shall apply accordingly. 2.6 The show cause notice has been adjudicated as per the impugned order referred in para 1 above. 2.7 Aggrieved appellant has filed this appeal. 3.1 We have heard Shri Rajesh Kumar Yadav, Advocate for the appellant on 19.10.2023, when he was directed to file "reconciliation statement taking figures of the OIO and VCES duly certified by the Chartered accountant and file his vakalatnama". Matter was listed on 30.11.2023. 3.2 Arguing for appellant learned counsel submitted that: ⮚ The notice and impugned order are bad in law as the demand of service atx was determined in consolidated manner in respect of two proprietorship firms registered separately and filing separate ST-3 return. H....
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....submission of the noticee and arguments raised at the time of personal hearing held on 16.10.2015. From the facts of the case, I observe that following are the moot issues of the instant proceedings. 1) Whether a proprietorship concern has an identity independent of its proprietor? 2) Whether the Best Judgment method enumerated in Section 72 of the Finance Act,1994 may be applied to present proceedings? 3) Whether Shri Uday Veer Singh had not determined his Service Tax dues correctly with an intent to evade payment of Service Tax. 4) Whether the demand should remain limited to the period covered in the VCES declaration filed by the noticee? 3.1. The defence has vehemently pointed out that the demand has been raised wrongly upon Shri Uday Veer Singh instead of his two registered proprietary concerns namely M/s Jyoti Estate and M/s Jyoti Syndicate; Demand cannot cover the activities undertaken by its proprietor as shown in Income Tax Returns but not recorded in the accounts of either of the two registered proprietary concerns;. Thus they have tried hard to carve out case as if the proprietors of a proprietary concern and its proprietor shi....
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....1 of Indian Penal Code and under Section 11 of General Clauses Act does not include 'proprietor' and hence a proprietary concern is not a legal entity or juridic person and it can neither initiate any proceedings nor proceedings can be initiated against it. In Anas Industries, rep. by its proprietors. Ram Mohan v. Sri Suresh Bafna, 1999-1 L.W. (Crl.) 405, B. Akbar Basha Khadiri, J. held that Anas Industries is the accused and it is not a juridical person and the prosecution against the proprietorship suffers inherent defect and liable to be quashed. In yet another decision in Vaidyanathan, etc. V. Dodla Dairy Limited, etc. 1999-1 L.W. (Crl.) 395, M. Karpagavinayagam, J. held that it is a settled position of law that the proprietorship concern by itself iS not legal entity apart from its proprietor; the proprietary concern and the proprietrix are one and the same person. The learned Judge further held, that both proprietorship and proprietrix are one and the same and it can be put in the cause title of the complaint, while prosecuting the drawer either as proprietorship concern represented by proprietrix or the proprietrix, representing the proprietorship c....
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....on that the prosecution against the proprietor representing the proprietorship concern or proprietorship concern represented by its proprietor are one and the same, as both these things sink, sail and merge with only one entity 14. So, the above proposition of law laid down by this court in regard to cause title relating to the accused would apply equally to the cause title of the complainant also. Therefore, by following the above proposition, it can be safely held that the prosecution by the proprietor representing the proprietorship concern or the proprietorship concern represented by its proprietor are one and the same, as both things convey the same meaning 15. Therefore, even without amendment the complaints are maintainable, because the complainant in these cases is only the proprietor Subramaniam representing the proprietorship concern. ● Hon'ble Punjab and Haryana High court in the case of Vinod Kumar Gupta Vs. CCE 2013 (287) E.L.T. 54 (P & H) again affirmed the above view,Relevant part of the Judgment has been reproduced below:- 9. Having heard learned counsel for the parties, we are of the considered opinion that proprietorsh....
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....to imposition of penalty to the proprietor or the partner, as the case may be, therefore, imposition of penalty on the proprietor independently would not be legal. 3.2. I observe that in terms of Rule 2(d)(ii) of Service Tax Rules 1994 person liable to pay Service Tax shall be the provider of the service except as defined in clause 3 of Section 65 apply for registration. of Finance Act-1994 Further Rule ibid also prescribe that person liable to pay tax shall further observe that registration No. of the two proprietorship concerns i.e. M/s Jyoti Syndicate (Registration No. AFHPS2425MSD001) and M/s Jyoti Estate (Registration No. AFHPS2425MSD002) contains the very same PAN No. AFHPS2425M. It leaves no doubt that both the registration have been granted to very same person having that PAN No. i.e. AFHPS2425M. This is not the case for defence that any other person except Shri Uday Veer Singh had obtained the registration for M/S Jyoti Estate and also for M/s Jyoti Syndicate. Further Rule 2(C) of Central Excise Rules 2002 also relevant for Service Tax matters for the terms not defined in Finance Act-1994 or Service Tax Rules 1994, defines the term 'assessee' as person lia....
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....erve that Shri Uday Veer singh had not filed the St-3 return for the period April 2009 to September 2009 for his proprietary concern M/s Jyoti Estate. Further despite filing the return, best judgment method may also be resorted to when tax has not been assessed in accordance with provisions of chapter V of Finance Act-1994 and the Central Excise Officer may require the person liable to pay tax produce such documents, accounts or other evidence as may be considered necessary by him to determine the correct amount of tax payable by him. I further observe that in the show cause notice it has been discussed at length as to how correct amount of tax has not been paid by Shri Uday Veer Singh i.e. the person liable to pay tax. As regards requiring separate accounts /Balance sheet in respect of each of the two proprietor ship concerns of Shri Uday Veer Singh, I observe that up to 31.03.11 service Tax was required to be paid on the basis of actual amount received by the service providers thus it is imperative to know the quantum of opening and closing debtors; the value of services rendered during the F.Y. separately in respect of two proprietorship concerns of Shri Uday Veer Singh to ascer....
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....nd that the gross receipts referred to have also in the income tax return have been duly reconciled with the service Tax return in the subject Show cause Notice and all items though taxable under the Income Tax Act-1961 but not taxable under the provisions of Finance Act-1994 have been duly excluded for computation of amount of Service Tax payable by Shri Uday Veer Singh. As regards identification of each transaction of service provided I find that it is not the case for defence that such gross receipts includes any item of income which is not liable to be taxed under the provisions of Finance Act1994 More over they have also accepted in Para D.3 of their defence reply that that there is no set norm under which transactions takes place between him (real estate agent) and the builders. The whole transactions are undertaken based on mutual trust in general and wisdom of the builder in particular. For the sake of ease Para D.3 has been reproduced as follows:- D.3 That in order to discuss the position of point of taxation w. e. f, 01.04.2011, it is pertinent to understand the peculiar nature of transactions and levy of service tax on the Real Estate Agents Services'. Befor....
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....ng form. Clients pay directly to builder, and the clients' ledger account is maintained in proper manner 3.7.The defence has pleaded that they check Form 26 AS at the end of Financial year and then only come to know that in how many cases they had been paid TDS alone and in how many cases have been paid along with commission. Thus though their commission becomes payable immediately after the prospective buyers pay to the builder against the bookings made by them yet they did not have any formal mechanism to know about the same till the end of the financial year. As such despite showing such utter disregard to Service Tax law and procedure now they have been daring the department to prove individual transactions On the one hand they have been showing regards for the provisions of Income Tax Act to avoid penalty on the other hand they choose to ignore the provisions of Service Tax laws and procedure blatantly, which requires them to keep records that include invoices for providing services in respect of each transactions, without having any regard for the same or fear of penal action for such contraventions. In the absence of specific details about each transactions it w....
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....ount paid is refunded to him. However for the sake of argument ifit iS presumed that bookings are cancelled and the real estate agent is not paid any commission for such cancelled booking still it cannot be taken a plea to not to pay Service Tax since Rule 6(3) of Service Tax Rules 2004 enables him to take credit of excess Service Tax paid where the amount of Service is renegotiated due to deficient provision of service or any terms of contract, alternately he may resort to provisional assessment in As already accepted by the defence in Para D2 that under the terms of Rule 6(4) ibid in the cases where the invoice are not provisions of the Point of Taxation Rules, 2011, issued within the time period specified in rule 4A of the Service Tax Rules, 1994, the point of taxation would be the date of completion of provision of the service or receipt of payment whichever is earlier.It is surprising that despite being aware with the legal provisions on the - subject they had not bothered to ensure compliance. Thus find that the defence plea lacks merit and cannot be used as an alibi to not to pay Service Tax Dues. 3.9. I find that not on each and every financial transaction shown in....
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.... person's handwriting, and in the case of a document executed or attested, that it was executed or attested by the person by whom it purports to have been so executed or attested; b) admit the document in evidence, not withstanding that it is not duly stamped, if such document is otherwise admissible in evidence." 3.11. Since the noticee himself has produced the Balance Sheet along with the Income Tax Return filed under the statutory provisions of Income Tax Act-1961 therefore there reason as to why the contents of these documents should not be considered as truth. is no Moreover the defence has not indicated any infirmity in the Balance sheet and Income Tax Return. In this regard I am also placing reliance on the case of Kothari Shah Texturisers P Ltd. 200(196)ELT 116 (Tri Mumbai). 3.12. I observe that after amendment of Section 65(105) wef 16.06.2005 to include services to be rendered even advance and deposits are liable to be taxed on receipt basis even prior to provision of service, In-case services are not provided assessee has been granted relief under Rule 6(3) of Service Tax Rules-1994. Rule 3 of Point of Taxation Rules 2011 states that point ....
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....e that the appellant satisfies the terms and conditions of the Exemption Notification. It is well settled that Exemption Notification have to be read in the strict sense." Denying the exemption benefit the court further emphasized the requirement to comply with the conditions of the exemption notification and observed that "However, we make it clear that on principle this judgment does not settle the law and our reasoning is based only on the facts and circumstances of this case, namely, that the appellant had failed to discharge burden placed on it while claiming the benefit of Exemption Notification ● In CCE Vs. Paranteral drugs (2009(236) ELT 625 SC ) The Supreme Court reaffirmed the above principle. The Para 8 of the judgement is reproduced below:- "We may add that exemption notifications have to be read strictly. We may also add that the burden is on the assessee to prove that the item falls within the four corners of the exemption notification" 3.13. However I have noticed that it would have helped the noticee to produce relevant documents such as contracts of loan showing terms and purpose of loan certificate from the person advancing the loan/ detail....
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....unlight Estate 78,585 78,585 78,585 78,585 78,585 SMV Agencies 1,92,932 1,92,932 0 0 0 Jyoti Super Const 0 18,50,000 18,50,000 75,000 75,000 Total amount of advances claimed to be loan 2474802 4403387 4210455 2435455 2435455 Amount shown as advances in Balance sheet (Schedule-3) 4552579 4705455 3450455 2885455 Amount of Advances for which no explanation could be offered by the noticee 149192 495000 1015000 450000 3.14. I find that neither the balance sheet explicitly discloses above facts nor the noticee cared to inform these facts to investigating Officer despite being given enough opportunity However in order to avoid possibility of taxing repeatedly the very same amount, I hold that the Advances standing at the beginning of the Financial year need to be adjusted; this will ensure that only incremental Advances of a year are subjected to tax in that year 3.15. I find the noticee had submitted only part information/ documents requisitioned by the investigating officer and did not provide inform....
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.... Zee Developers Ltd 53145 2010-11 Lucky Properties Real 24374 2010-11 R.B.Associates 58786 2010-11 Ashok Kumar 169472 Total 913688 b. They had received amount from the builders for which no service could be provided by them to such builders hence such receipts as detailed below had also been written off He claimed to have paid the appropriate Service Tax against treating such receipts as advance from customers at the time of their receipts. Amount in Rs. 2010-11 Qmax limited. 41115 2010-11 ANSAL Proverties_and 117807 2010-11 Ansal build wel ltd 87461 2010-11 Ansal housing & construction 120937 2010-11 Smy_agencies ()]td. 192932 Total 560252 c. He further stated that in the past, some amounts due from builders could not be realized hence such Debtors accounts were written off in past 2-3 years, however Service Tax amounting to Rs. 1,01,347/- payable against such income remained out standing in their books hence the same has also been written off in 2010-11. d. In support of his aforesaid claims he had assured to provide the relevant evidences....
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.... noticee and builders released commission as and when buyers pay them. 3.20. I have noted that sufficient opportunity had been provided to them but the noticee failed to establish the said fact either at investigation stage or at adjudication stage by submitting relevant evidence or even a certificate from the chartered Accountant to establish the nature of transactions for the credit balances written off by them. It is not out of context to point out that nature of transaction cannot be distinguished from the entries in bank passbooks /accounts and or ledger accounts containing entries without sufficient description and evidence 3.21. As I have already discussed that under Service Tax law all receipts accepted in advance for services to be provided in future are required to be taxed and onus remains on the assessee to establish that an advance is not required to be taxable for not being accepted by him in lieu of providing service, therefore I hold that in the absence of any evidence or a certificate from a Chartered Accountant to the contrary, the amount having Credit Balance of Rs.15,75,287/- and 7,14,759/- written off by the noticee during 2010-11 and 2011-12 ....
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....x is required to be paid. It is pertinent to mention that any realization out of the debtors outstanding as on 31.03.2011 would be included in this amount due to the fact that up to 31.03.2011 Service Tax was required to be paid on cash / receipt basis hence no service Tax would have been paid on the value of services not realised till 31.03.2011. Therefore I find the defence plea that Service tax having been already paid on the difference in the opening and closing due from debtors lacks merit 3.23. I have also noted that Service Tax payable by the noticee as mentioned in the SCN is determined by the Service Tax liability on cash basis till 31,03.2011 and in accordance with the provisions of Point of Taxation Rules 2011 as evident from the workings mentioned there in. These workings are fully transparent and bring out the manner of determination of Service Tax in a crystal clear manner. Any amount on which the Service Tax has been claimed to be paid by the noticee has been mentioned therein clearly. At this stage, except adjustment of advances standing at he beginning of a Financial year, no further modification is required in the Computation of Service Tax shown in Table....
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....solidate entry in bank passbook or statement. It is surprising as to why scarce public resources would be consumed for vivisection of amounts already shown in segregated form by the noticee himself. I have also noted that the noticee has pleaded that invoices are not issued by them and their revenue is booked on the basis of amount paid by the builders to them as mentioned in their 'Form26AS-Details of Tax credit for tax deducted at source' by the builders, thus there is no possibility that the builder had not paid the said amount to the noticee. As such in the absence of any related evidence or Certificate from a Chartered Accountant to the contrary, I hold that Service Tax liability of Rs.1,01,347/-being shown by the noticee in his balance sheet and written off during the Financial year 2010- 11, is the amount of Service Tax which has been collected by the noticee from his clients but not deposited to exchequer. Such amount is liable to be recovered under Section 73A of the Finance Act-1994. 3.26 The defence has made efforts to dispute the leviability of Service Tax on the consideration received by the noticee for undertaking the marketing on underwriting basis U....
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.... I have noted that in the show cause notice the difference between the Income shown in Income Tax Returns and profit mentioned in P&L Account of the noticee has been duly reconciled. Items of income on account of certain expenditure viz. Penalty and interest, donation, not being allowed as deduction under the Income Tax Act, and thus added back into profit have been duly identified. Further items of incomes not shown in P&L viz. Income from house property, capital gains, interest on savings Bank and bank deposits hence added to Profit mentioned in P&L to arrive at the figure of income liable to be taxed under Income Tax Act have also been identified. I observe that such reconciliation was necessary since in the income Tax Return Shri Uday Veer Singh had to mention his entire income which may include heads of income other than profit derived from business or profession shown by the noticee in his P&L Account but liable to be taxed in terms of provisions of Finance Act-1994 e.g. 'Rental of immovable property'. In this process gross receipt of the business relating to profit derived from business or profession and mentioned in the Income Tax Return also get verified along with....
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....5703836 10578303 87435383 10 Add :- Rental of immovable property (Shop) shown in ITR as income from House Property and not included in the profit of the business reported in Profit and Loss Account. 375600 375600 395391 456000 1602591 11 Gross taxable value of services on which Service Tax was required to be paid by Shri Uday Veer Singh 9+1 0 10980433 10924011 56099227 11034303 89037974 12 Less value services on which service Tax paid as per ST-3 returns filed by M/s Jyoti Syndicate and ]yoti Estate 5485971 4907438 38830897 5078351 54302657 13 Value of taxable services suppressed in ST-3 Returns filed by Shri Uday Veer Singh for M/s Jyoti Syndicate and Jyoti 12- 11 5494462 6016573 17268330 5955952 34735317 14 S. Tax Rate 10% 10% 10% 12% 15 Service Tax Payable the value of service suppressed 13* 14 549446 601657 1726833 714714 3592.651 16 Ed.Cess and S. & H.Ed. Cess @ 3% of Service Tax Amount 15* 3% 16483 18050 51805 21441 107780 17 Total Service Tax and Ed. Cess Short Paid by S....
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.... (a) "Chapter" means Chapter V of the Finance Act, 1994; (b) "declarant" means any person who makes a declaration under sub-section (1) of section 107:; (c) "designated authority" means an officer not below the rank of Assistant Commissioner of Central Excise as notified by the Commissioner of Central Excise for the purposes of this Scheme; (d) "prescribed" means prescribed by rules made under this Scheme; (e) "tax dues" means the service tax due or payable under the Chapter or any other amount due or payable under section 73A thereof, for the period beginning from the 1st day of October, 2007 and ending on the 31st day of December, 2012 including a cess leviable thereon under any other Act for the time being in force, but not paid as on the 1st day of March, 2013 (2) Words and expressions used herein and not defined but defined in the Chapter or the rules made thereunder shall have the meanings respectively assigned to them in the Chapter or the rules made thereunder. 3. Person who may make declaration of tax dues 106. (1) Any person may declare his tax dues in respect of which no notice or an order of determination under section 72 or sec....
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....te as is fixed under section 75 or, as the case may be, section 73B of the Chapter for the period of c delay starting from the 1st day of July, 2014. (5) Notwithstanding anything contained in sub-section (3) and sub-section (4), any service tax which becomes due or payable by the declarant for the month of January, 2013 and subsequent months shall be paid by him in accordance with the provisions of the Chapter and accordingly, interest for delay in payment thereof, shall also be payable under the Chapter (6) The declarant shall furnish to the designated authority details of payment made from time to ime under this Scheme along with a copy of acknowledgement issued to him under sub- section (2). (On furnishing the details of full payment of declared tax dues and the interest if any, payable under the proviso to sub-section (4), the designated authority shall issue an acknowledgement of discharge of such dues to the declarant in such form and in such manner as may be prescribed 5, Immunity from penalty, interest and other proceeding 108 (1) Notwithstanding anything contained in any provision of the Chapter, the declarant, upon payment of the tax dues declar....
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....tent to prevent departmental authorities to ascertain the amount of Tax evaded by them. By artificially splitting his revenue between two registrations he had ensured a ready space for his alibi that Receipts liable to be taxed under the provisions of Finance Act-1994 and not mentioned under one to Service Tax Registration pertains to another Service Tax registration. However this alibi could not rescue him as revenue of both the registered proprietorship concerns was verified with his Income Tax Return and evasion could be detected. 3.35. I hold that during the period 2009-10 to 2012-13, Shri Uday Veer Singh, Thus I Proprietor of M/s Jyoti Syndicate & M/s Jyoti Estate had not mentioned the true and correct value of Taxable Services in the ST-3 Returns file by him, and had suppressed the same by an amount of RS. 1,95,52,026/- mentióned in the table given above. Thus for filing the declaration under VCES 2013 under Finance Act2013 his true tax dues in terms of Section 105(e) should be disclosed for amount not less than Rs.21,66,819/- (Rs.20,65,472/ +Rs.1,01,347/-) though some amount for the period 1 October 2007 to 31st March 2009 may also be liable to be added to th....
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....1)(e) would make it clear that the position of a declarant vis-a-vis his service tax dues would have to be ascertained as on 1- 3-2013. If any proceedings for determination of the tax dues of a person have been initiated before 1-3-2013, declaration of such a person would not be accepted. Likewise, arrear of tax which could be declared in such declaration would be the service tax due or payable for the period between 1-10- 2007 to 31-12-2012 and which sum is not paid before 1-3- 2013. In plain terms, therefore, if any service tax iS due and payable by a person for the aforesaid period, the same would be included in the definition of the expression "tax dues" if the same has not been paid as on 1-3-2013." 3.36. I also observe that in terms of first proviso to Section 106 of Finance Act-1994 any person who has furnished return under Section 70 of Finance Act-1994, shall not be eligible to make declaration under the Voluntary Compliance Encouragement Scheme- 2013 for the period covered by the said return. Whereas since Shri day Veer Singh 'have filed Service Tax Return for the period April 2011 to September 2012 through his two registered proprietorship concerns i.e. M/S ....
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....ct-1994 read with; i. he failed to pay Service Tax payable during the period April 2009 to March 2013 as stipulated vide Section 68 of Finance Act-1994 read with Rule 6 of Service Tax Rules- 1994, j. He failed to keep, maintain or retain books of account in respect of his two registered proprietorship concerns namely M/s Jyoti Syndicate and M/s Jyoti Estate separately as required under Rule 5 of Service Tax Rules-1994 k. he did not file the returns prescribed under Section 70 of Finance Act-1994 read with Rule 7 of Service Tax Rules 1994 required to be filed for the period April 2009 to September 2009 and also failed to submit other ST-3 returns within the prescribed time l. He failed to pay a sum of Rs. 1,01,347/ - to the exchequer as required under Section 73A(1) ibid being the amount of Service Tax collected from his clients 3.39. From the above narrated facts, hold that Shri Uday Veer Singh, Proprietor of M/s Jyoti Syndicate and-M/s Jyoti Estate had not paid Service Tax amounting to Rs. 20,65,472/- payable by him during he period April'2009 to March 2013. emerges that he had also recovered It further failed to pay the same to the....
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....o pay the Service Tax shall himself assess the tax due on the services provided by him and shall furnish to the Superintendent of Central Excise, and at such frequency and with such late fee not exceeding twenty thousand rupees, for a return in such form and in such manner delayed furnishing of return as may be prescribed. Rule 7 of the Service Tax Rules 1994 requires that every assessee shall submit a half yearly return in Form ST-3 for the months covered in the half yearly return, by the 25th of the month following the particular half year except for the financial year 2012-13 when the reverse charge mechanism and negative list based service tax regime was introduced due dates were 1st, 2nd quarters and 2nd half were 25 Nov 2012,15 April 2013,10 September 2013 respectively. I also note that Shri Uday Veer Singh had not complied with the statutory requirement as discussed above, and thus he had rendered himself liable for penal action under Rule 7(c) of Service Tax Rules-1994 Rule 7 (c) ibid prescribes for a penalty of Rs.500/- if the delay limits to 15 days similarly if the delay extends up to 30 days the penalty also increases to Rs.1000/- however if the default continues beyond....
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....gh is liable for penalty under Section 76 & 78 of the Finance Act, 1994.I find that he was under a statutory obligation to & assess and pay its service tax liability correctly and timely and also to communicate the same to the department in the prescribed manner. find that he had not discharged its I obligation in letter and spirit and rather, he had attempted through all possible efforts to escape from the payment of due Service Tax to the department knowingly and willingly with intent to evade payment of Service Tax. In view of the above, he had willfully suppressed the facts from the department about providing taxable service, non/short payment of Service Tax with the intention to evade payment of Service Tax by giving false with declaration in their ST-3 returns and VCES declaration dt.24.12.2013 that no other amount has been received in money, against the taxable services provided by them. As regards invocation of extended period of limitation, since he has not declared and paid Service Tax dues correctly which were payable by him and has not filed ST-3 returns truthfully and correctly with intent to evade payment of Service Tax in contravention of the various provisions of th....
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.... view to evade liability to tax cannot be faulted nor considered inconsistent with the statutory prescription that justify invocation of the extended period of limitation." I further observe that in the instant case ingredients of suppression of facts, willful mis-statement, contravention of various provisions of the Service Tax Rules-1994, Point of Taxation Rules-2011 with intent to evade payment of Service Tax exist. I find that intention to evade is to be determined on the basis of entirety of the entirety of the circumstances as emphasised by Hon'ble Allahabad High Court in the case of Usha Martin Construction Steel Ltd. 2014 (306) E.L.T. 270 (AII.). I find that the ratio of the above referred judgments are squarely applicable to this case. I also hold that when ingredients to impose penalty are found to exist in a case, invocation of extended period of limitation 21,66,819/- is liable to be demanded and recovered from them by invoking extended period is justified and. hold that a sum of Rs. of 'limitation, under Section 73 and 73A of the Finance Act-1994 together with interest due thereon under Section 75 of the said Finance Act-1994. 3.44. I hold tha....
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....e authorities were not justified in imposing a penalty, ● In respect of this submission, reliance was placed on the decision in the case of M/s. Hindustan Steel Ltd. V. The State of Orissa reported in A.I.R. 1970 Supreme Court 253 = 1978 E.LT. ( 159). In paragraph 7 of the judgment, the Supreme Court considering the validity of the penalty imposed under the provisions of the Orissa Tax Act while observed that the liability to pay the penalty does not arise merely upon proof of default and an order imposing penalty can be passed provided the party has acted deliberately in defiance of law or is guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. In my judgment, the penalty imposed in the present case is clearly sustainable as the petitioners have acted deliberately in defiance of law and their conduct was dishonest in making a false declaration about the weight of the third consignment. On the test laid down by the Supreme Court, the penalty imposed in the present case can be perfectly justified. In my judgment, there is no merit whatsoever in the petition and the same deserves to be dismissed 3.45. I further find t....
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....8, as the case may be, as amended by the Finance Act, 2015 shall be applicable. (2) In cases where show cause notice has been issued under sub-section 3 of section 73 or under the proviso thereto, but no order has been passed under sub-section (2) section 73 before the date on which the Finance Bill, S 2015 receives the assent of the President, the period of thirty days for the purpose of closure of proceedings on the payment ofs service tax and interest under clause (i) of the proviso to sub-section (1) of section 76 or on the payment of service tax, interest and penalty under clause e of the second proviso to sub-section (1) of section 78, shall be counted from the date on which the Finance Bill, 2015 receives the assent of the President 3.47 As regards penalty under erstwhile Section 76, earlier it was imposable for the period only up to 10.05.2008 since erstwhile Section 76 was amended vide the Finance Act, 2008 w.e.f. 10.05.2008 wherein a proviso appended below the erstwhile Section 78 provided that if the penalty is payable under this section, the provisions of section 76 shall not apply. The end of justice will be met if penalty is imposed under Section 78 ....
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.... partners of a partnership firm to sue or to be sued in the name of the firm. A proprietary concern is only the business name in which the proprietor of the business carries on the business. A suit by or against a proprietary concern is by or against the proprietor of the business. In the event of the death of the proprietor of a proprietary concern, it is the legal representatives of the proprietor who alone can sue or be sued in respect of the dealings of the proprietary business. The provisions of Rule 10 of Order XXX which make applicable the provisions of Order XXX to a proprietary concern, enable the proprietor of a proprietary business to be sued in the business names of his proprietary concern. The real party who is being sued is the proprietor of the said business. The said provision does not have the effect of converting the proprietary business into a partnership firm. The provisions of Rule 4 of Order XXX have no application to such a suit as by virtue of Order XXX Rule 10 the other provisions of Order XXX are applicable to a suit against the proprietor of proprietary business "insofar as the nature of such case permits". This means that only those provisions of Order X....
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.... or any other statute, a person as a Director must come within the purview of the said description, so far as a firm is concerned, the same would carry the same meaning as contained in the Partnership Act. 10. It is interesting to note that the term "Director" has been defined. It is of some significance to note that in view of the said description of "Director", other than a person who comes within the purview thereof, nobody else can be prosecuted by way of his vicarious liability in such a capacity. If the offence has not been committed by a company, the question of there being a Director or his being vicariously liable, therefore, would not arise. 11....... 12....... 13........ 14. We, keeping in view the allegations made in the complaint petition, need not dilate in regard to the definition of a "company" or a "partnership firm" as envisaged under Section 34 of the Companies Act, 1956 and Section 4 of the Partnership Act, 1932 respectively, but, we may only note that it is trite that a proprietary concern would not answer the description of either a company incorporated under the Companies Act or a firm within the meaning of the pro....
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.... Rules. As per the respondents failure to pay Service Tax according to the provisions of the Chapter V and Rules is the pre-requisite and pre-condition for invoking clause (b) to Section 72 of the Fin Act. Provisions of Section 72(b) would apply only when the assessee had failed to access the tax in accordance with provisions of Chapter V of the Fin Act. 25. Section 72 of the Fin Act, as the heading states, empowers and authorises the Central Excise Officer to make and pass an order known as 'best judgment assessment'. In terms, the Central Excise Officer can make an assessment of the value of the taxable service to the 'best of the judgment' and determine the sum payable by an assessee or refundable to the assessee on the basis of such assessment. The expression 'best judgment assessment' is to be found in Section 144 of the Income Tax Act and is a well known and understood. Section 144 of the Income-tax Act is applied when an assessee fails to make a return or fails to comply with the notice issued to substantiate the return or directions issued for production of documents, etc. The expression 'best judgment assessment' in tax enactments refers to fair estimate and reaso....
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....Section 72 were in force. 6. We find that in the absence of any information coming forth from the appellants as regards exact amount collected by them for the services rendered, the lower authorities have resorted to the next possible way for arriving at the amount of service tax payable by the appellant. We find that it was for the appellant to come forward and justify that the accounts and the bill book kept by them are correct and they have to be considered as an evidence, for collection of the amount. We find that the adjudicating authority in his OIO has clearly brought out the lacunae and the mis-match of the amounts collected by the appellant and the bill books shown by them as regards the service charges collected. We find that these particular findings of the adjudicating authority has not been contested by the appellant before the first appellate authority. 7. Hence, we hold that the calculation of the service tax payable under the provisions of Section 72 seems to be correct as it is understood that there is a escapement of the service tax." Thus we do not find any merits in the submissions made by the appellant challenging findings arrived in the im....
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....provisions of the Chapter shall accordingly apply. From the perusal of the above section it is evident that mere filing of declaration under VCES scheme is not sufficient the same could have been rejected if found substantially false and proceedings initiated against the declarant in respect of the tax not paid or short paid. In present case when in the view of revenue appellant had short paid the service tax, then proceedings as per the above referred section have been contemplated. We do not find anything wrong in the proceedings initiated against the appellant. Hon'ble Madhya Pradesh High Court has in the case of Yashwant Agrawal & Co. [2017 (47) S.T.R. 10 (M.P.)] observed as follows: "11.That sub-section (2) of Section 106 of the Finance Act, 2013 envisages a situation under which a declaration submitted by an assessee can be rejected if under sub-section (1) he is entitled to declare his tax dues. In this regard the present case falls under the second proviso of sub-section (1) of Section 106 which states that if there is a notice or an order of determination which has been issued to the assessee in respect of any period no declaration shall be made with regard to ....
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....tutory documents made by the appellant. Balance Sheet and Profit & Loss accounts are made on the basis of entries in the book of accounts which are also required to be statutorily audited. The entries in the book of accounts could not have been brushed aside on the basis of the above submission specifically when the reconciliation made by the qualified Chartered Accountant certifies the same. The demand made on the basis of the entries in such book of accounts after allowing for all the possible adjustment cannot be set aside in absence of anything contrary on record. In case of Somasundaram Memorial Social Education Rural Development Society [2017 (3) G.S.T.L. 193 (Tri. - Hyd.)] Hyderabad Bench has held as follows: "4. The brief facts of the case are that the appellant is a society formed with unemployed youth. The appellant was providing the manpower on outsourcing basis to various Government offices. When Voluntary Compliance Encouragement Scheme (VCES) was introduced, the appellant filed application thereunder on 30-12-2013 declaring the liability of Rs. 13,20,395 and after deducting the amount of Rs. 2,19,623/-, net liability of Rs. 11,00,762/- was arrived and they pa....
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....ellant. ● On the basis of admitted liability in respect of underwriting, as per the VCES declaration filed by the appellant. Though the declaration has been rejected by the adjudicating authority for the reason that appellant was filing returns etc., during the period of dispute as recorded in the impugned order, however the benefit of immunity as available in respect of the demand covered by the declaration has been extended to the appellant and no penalty imposed on the appellant under section 78 in respect of this amount. For the remaining amount which is not covered by the declaration issue has been examined and demand confirmed separately and penalty has been imposed on that amount of tax evaded by the appellant under Section 78. The amount paid under the VCES have been appropriated against the demand made in respect of underwriting services which have been admitted by the appellant. Thus if not directly, indirectly adjudicating authority has given the benefit of the VCES seheme to the appellant, by way of impugned order. 4.12 Thus we do not find any merits in the submissions made by the appellant in respect of the demand made on the account of suppression....
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....1654304 1174738 1707645 9 Mise Accounts having credit balance written off ( SI. no. 2 of Table-6) 1569464 714759 2284223 written off and shown as Income. As no service was The credit balances ( written off) related to the amount due from Sub-broakers from whom service was received. The related ledgers attached as R-2 Coll. Besides, some advance amount taken was also provided/to be provided against said amount, service tax is not liable to be paid on said amount written off as per grounds of appeal. Party-wise break up of written off credit balnce attaches as R-2 Coll. All the related ledgers are attaches as Annexure-R3 Coll. Particulars Original No. 09/Commr./ST/G28/2015-16 Inocme on account of Commission ( booked on due basis) as per combined Balance Sheet of M/s Jyoti Syndicate and M/s Jyoti Estate Total reciepts chargeable to service tax { amount of commission received plus rent recived ( SI. No.2+3)} For JYOTI SYNDICATE For JYOTI ESTATES No// Detbl) 1/2 Redpictor 10 Profit on Sales of Booking of Flats (SI, No. 3 of table-6). Inome shown as profit in balance sheet for sine of flats in terms of underwriting agreement with M/s Ansal Build....