VCES - The Scheme does not envisage investigation by designated authority into veracity of declaration. As such, in implementation of VCES, effort must be to accept declaration as far as possible and recover arrears of tax - Commissioner (A)
Rejection of Declaration Set aside
WITH hardly a week for the Scheme to end, when will the Departmental officers understand this spirit?
- 13.12.2013 had reported a High Court order holding that the order of rejection of VCES declaration was appealable. The party did appeal and yesterday the Commissioner (A) passed an order setting aside the rejection order.
Look at this case:
The assessee filed a declaration on 17.7.2013 declaring a total Service Tax liability of over Rs. 11.3 Crores. The Department sought to reject the declaration on the ground that the Range Superintendent had written two letters to the declarant in February 2013. The Show Cause Notice to reject the declaration was issued on 18/9/2013 (after two months). On 27.11.2013, the Order rejecting the declaration was passed. As per Board Circular No. 170/2013 dated 8.8.2013, the Scheme does not have a statutory provision for filing of appeal against the order for rejection of declaration. This was challenged in the P&H High Court and the High Court, as mentioned above, held that the rejection order is appealable.
As per Board Circulars, the Show Cause Notice to reject the declaration has to be issued within thirty days and the declaration cannot be rejected based on some letters written to the assessee (when no Audit or anti evasion objections are pending)
The Commissioner (A) yesterday set aside the rejection order both on limitation as well as on merit with consequential relief. He also directed that the designated authority would allow the declarant to avail the benefit of VCES subject to fulfilment /compliance of other conditions including deposit of 50% tax dues by 31.12.2013.
Here the assessee filed a declaration on 17.7.2013 and since then, his peace of mind must have been shattered. Here is somebody who is prepared to give you 11 crores of rupees and you want litigation and only litigation. It is this attitude of the officers that damages the cause of VCES. Government should have educated the Service Tax officers that the FM wanted to collect that extra revenue through VCES and as loyal employees, you should not frustrate the efforts of the FM - after all he gave you a huge cadre review. At least in the next few days, be grateful and work for the success of the Scheme; keep your audit and preventive brilliance in cold storage and welcome the declarants wholeheartedly to your fold - YOU OWE IT.
You can get the Commissioner (A)'s order HERE.