Principal Commissioner Vs Federal Mogul Goetze India Limited & Anr. (Delhi High Court)
Delhi High Court held that an audit report cannot be regarded as an order of determination under section 72, 73 or 73A of the Finance Act, 1994 hence benefit under Voluntary Compliance Encouragement Scheme (VCES) cannot be deprived.
Facts- Revenue has preferred the present appeal. Notably, the controversy in the present appeal relates to the respondent’s application under the Voluntary Compliance Encouragement Scheme, which was introduced by virtue of Chapter VI of the Finance Act, 2013.
The Designated Authority proposed to reject the tax payer’s application under VCES on the ground that it was ineligible in terms of Section 106 of 1994 Act and the Designated Authority communicated the same to the appellant by a letter dated 09.01.2014.
Conclusion- Clearly, an audit report is not an order of determination under either of the aforesaid sections, as mentioned in the opening sentence of Section 106 (1) of the 2013 Act. Insofar as the issuance of the SCN is concerned, there is no cavil that SCN was a limited notice in respect of service tax dues relating to the medical insurance services provided to the tax payer’s employees. The tax payer’s declaration under Section 107 of the 2013 Act was not in respect of the said dues. The order-in-original dated 24.05.2016 also indicates that the tax payer was entitled to file a declaration in respect of the dues that were not covered by an earlier demand cum show cause notice. On that basis, the tax payer’s declaration was partly allowed.
