Writ Petition No. 2117 of 2015. Case: Yashwant Agrawal and Co. Vs Union of India. High Court of Madhya Pradesh (India)

Case NumberWrit Petition No. 2117 of 2015
CounselFor Appellant: Shri Vivek Dalal, Advocate and For Respondents: Shri Prasanna Prasad, Advocate
JudgesP.K. Jaiswal and Vivek Rusia, JJ.
IssueFinance Act, 2013 - Section 106
Citation2017 (47) STR 10 (MP)
Judgement DateJune 15, 2016
CourtHigh Court of Madhya Pradesh (India)


Vivek Rusia, J.

  1. Facts of the case are as under:

    Petitioner is engaged in the business of construction of petrol pumps for various oil companies and in addition to this they also worked for construction of road for MPAKVN. The petitioner till 31-5-2007 was registered with the Service Tax Department under the category of Commercial and Industrial Construction Services.

  2. That the Central Government has introduced Service Tax Voluntary Compliance Encouragement Scheme, 2013 (for short ''VCES'') w.e.f. 10-5-2013 by way of amendments in the Finance Act, 1994. Under the said Scheme any person may declare his tax dues in respect of which no notice or an order for determination under Section 72, 73 or 73A of [Finance Act, 1994] has been issued or made before the 1st day of March, 2013. The procedure has been prescribed for availing the Scheme. With the intention to avail the benefit under the VCES petitioner submitted a declaration in Form VCES-1 declaring the tax dues amounting to Rs. 7,19,490/- on 21-6-2013 for the period April, 2010 to December, 2012 under the category of "Works Contract". Along with the declaration petitioner has deposited 50% of the tax dues i.e. Rs. 4,56,973/- vide Challan dated 26-6-2013. Petitioner was also issued acknowledgement under the provisions of sub-section (2) of Section 107 of the Finance Act, 1994 under Form VCES-2 on 1-7-2013. Thereafter petitioner further deposited 50% of the tax dues i.e. Rs. 4,56,973/- vide Challan dated 26-6-2013. That a show cause notice was issued by the respondents on 17-9-2014 as to why the declaration given by the petitioner under VCES be not rejected on the ground that the show cause notice has already been issued to the petitioner on 16-4-2012 under the same category "Works Contract" for the period from 1-6-2007 to 31-3-2010.

  3. Pursuant to the said show cause notice petitioner submitted a reply that for the said period from 1-6-2007 to 31-3-2010 petitioner has already deposited tax along with interest on 15-6-2011 and the show cause notice has already been adjudicated on 16-6-2014 and now the final order is under challenge before the Commissioner (Appeals) and the same is pending. Petitioner has also challenged the show cause notice as the same cannot be issued beyond the normal period of one year from the date of declaration.

  4. The Deputy Commissioner, Service Tax Division, Indore after considering the reply of the petitioner vide order dated 16-10-2014 has passed the final order and rejected the entire claim of Rs. 7,19,490/- on the ground that the noticee i.e. the petitioner filed the VCES declaration despite knowing the fact that the show cause notice to them has been issued for the Works Contract service and by virtue of Section 106(1) of the Finance Act, 2013.

  5. Being dissatisfied by the order dated 16-10-2014 (Annexure P/1) petitioner filed the present petition before this Court. After notice respondent/Department filed the return denying the averments made in the petition and justifying the impugned order. Thereafter rejoinder and additional return were also filed.

  6. We have heard the parties at length.

  7. Shri Vivek Dalal, learned counsel for the petitioner submits that VCES was introduced on 10-5-2013 and under which the petitioner submitted declaration on 21-6-2013 and the Challan has also been issued after payment of the tax, therefore, by virtue of Section 111(1) of the Finance Act no notice or action can be taken after the expiry of one year from the date of declaration. The impugned order is without jurisdiction and contrary to the VCES, hence the same is liable to be set aside and the declaration given by the petitioner is liable to be accepted. In support of his contentions, counsel for the petitioner has placed reliance over the decision in the matter of Frankfinn Aviation Services P. Ltd. v. Asstt. Commr., Designated Authority, VCES, Service Tax reported in 2014 (34) S.T.R. 165 (Del.) in which in similar facts and circumstances the Court has held that Department cannot reject the declaration under Section 106(1) of the Finance Act, 2013.

  8. Per contra Shri...

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