VCES, 2013 – what happens if the amount is paid but the declaration is rejected?
WE received this mail -
“As per Section 97(1) of the Finance Bill, 2013, the last date for filing declaration under the VCES, 2013 is 31 st December, 2013 and the minimum 50% amount of tax dues has to be paid on or before 31 st December, 2013. The declarant has the option to pay the entire amount on this date but why would he do so when the law allows him to pay the balance 50% by 30 th June, 2014.
So, a prudent declarant will file the declaration on the 31 st December, 2013 and also pay the 50% amount on that date. Not that he cannot file the declaration after the passage of the Finance Bill, 2013 and the rules are framed thereafter. The declarant can very well file the declaration after the rules and the formats are notified but he would opt to pay the amount of minimum of 50% latest by the 31 st December, 2013.
In this scenario, if the designated authority rejects this “declaration” at a later date what would happen to the amount paid?
Section 99 says that any amount paid in pursuance of a declaration u/s 97(1) shall not be refundable under any circumstances .
This is highly unfair for the reason that the Government cannot withhold what is not theirs. At least, there should be provision for adjusting the same against the dues which are later confirmed against the declarant by the department based on his declaration submitted. And mind you, this is a voluntary disclosure scheme.
One would opine that the declarant should wait for the designated authority to decide in terms of s. 96(2) but here again section 97(2) only refers to “acknowledging the declaration” and nothing more. And above all, the 50% minimum amount has to be paid by 31 st December, 2013 else the declarant will miss the bus – so time is a constraint.
Interestingly, section 96(2) does not prescribe any time limit within which the designated authority has to decide whether the ‘declaration' is allowed or liable for rejection.
In this scheme of things, it would have been advisable to follow the KVSS, 1998 procedure where the scheme required the designated authority, after receipt of an application for settlement of tax arrears, to issue a certificate of intimation determining and directing the applicant to pay the “sum payable for full and final settlement of tax arrears” within a period of 30 days.
It is felt that the FAQ on VCES, 2013, if and when it is published, addresses these issues.”
DDT hopes that the Board is readying itself with answers for the barrage of questions that the prospective declarant has.