ST - VCES - Open Ended Scheme?
RECENTLY, the Karnataka High Court extended the benefit of the VCES 2013 to an assessee who had not opted for it.
If you remember, the Government had introduced a Scheme called Voluntary Compliance Encouragement Scheme, 2013 (VCES) as part of the Union Budget 2013. The Scheme in brief was like this:
(i) The scheme could be availed of by non-filers or stop-filers or persons who have not made a truthful declaration in their return. However, it was not applicable to persons against whom any inquiry or investigation is pending by the issue of search warrant or summon or by way of audit;
(ii) The defaulter was required to make a truthful declaration of all his pending tax dues (from October1, 2007 to December 31, 2012) and pay at least half of that before December 31, 2013; remaining half to be paid by:
(a) June 30, 2014 without interest; or
(b) By December 31, 2014 with interest from July 1, 2014 onwards;
(iii) On compliance with all the requirements the person was to have immunity from interest, penalties and other proceedings;
In the case of an assessee, the Original Adjudicating Authority confirmed a demand of Service Tax of Rs. 48,746/- with interest and equal penalty. On appeal by the party, the Commissioner (Appeals) has upheld the order of the original authority on 16.02.2010 - three years before the VCES came into existence.
The Tribunal confirmed the lower order and dismissed the appeal of the party -
The assessee took the matter in appeal to the High Court and the Karnataka High Court in a recent judgement observed,
Without going into the merits of the case, we are of the view that the Government of India introduced an amnesty scheme where, those persons who have not paid tax, if they pay the tax within the stipulated period under the scheme, the entire interest and penalty is waived.
In the instant case, when the assessee has paid the tax and the interest, the benefit of the scheme should be given to him.
So, the High Court affirmed the duty and interest (which were already paid by the assessee), but set aside the penalty.