CA Sandeep Kanoi
The High Court of Ahmedabad held in the case of Ramilaben Bharatbhai Patel v. Union of India that in exercise of writ jurisdiction, the High Court does not have power to waive or relax the condition of depositing 50% of tax dues by December 31, 2013 under the Service Tax Voluntary Compliance Encouragement Scheme, 2013.
Facts of the case – The petitioner made a declaration under section 107 of the tax dues, declaring an unpaid tax dues of Rs.16,42,936/, out of such tax dues the petitioner deposited a sum of Rs.8,01,120/ before December 31, 2013. Admittedly, thus, towards the first instalment there was a shortfall of Rs.20,148/. On the premise that 50% of the tax dues were not deposited before December 31, 2013 department has rejected the VCES deceleration of the Appellant.
Contention of the Assessee – The learned counsel for the petitioner, however, raised two fold contentions.He firstly contended that the shortfall was due to a bona fide calculation error.The amount involved was very small.He secondly contended that under section 110, the tax shortpaid could be recovered with interest, but the declaration itself cannot be rejected.
Held by High Court-
To our mind, neither of the two contentions can be accepted.The scheme makes no difference between tax dues which are shortpaid due to bona fide error and one which flows from deliberate inaction. There is no power for waiving or relaxing the condition of depositing 50% tax dues flowing from section 107.It would not be possible for this Court to exercise writ jurisdiction to direct the authority, in plain terms, which the statutory provision does not permit.
Coming to the second contention, the scheme envisages depositing tax dues in two stages.Only after the taxes are fully deposited stagewise that the declaration under section 107 would be accepted. Section 110 only pertains to recovery of the taxes declared, but not paid. This provision has no bearing on the invalidity of declaration when the declarant fails to deposit the taxes as provided in subsections (3) and (4) of section 107. If we interpret section 110, as urged by the learned counsel for the petitioner, that it encompasses both the cases of delay in depositing the taxes at the first stage of sub¬section (3) of section 107 and second stage of subsection (4) of section 107, the proviso to subsection (4) would be rendered wholly redundant. If as suggested, shortfall in the taxes could be accepted after charging interest under section 110, there was no need to make special proviso for extending time for depositing the remaining of the taxes under subsection (4) of section 107. Further, section 110 pertains to compulsory recovery of taxes with interest.Sub-sections (3) and (4) of section 107 refer to voluntary tax deposit by a declarant in terms of the scheme.Both these operate in separate fields.