ST - VCES - Order of Rejection Appealable? SC keeps issue for another day
THE Service Tax Voluntary Compliance Encouragement Scheme came to an official end on 31st December 2014, not the litigation that followed.
The CBEC in its Circular dated 8th August, 2013 clarified thus -
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What is the appeal mechanism against the order of the designated authority whereby he rejects the declaration under section 106 (2) of the Finance Act, 2013?
The Scheme does not have a statutory provision for filing of appeal against the order for rejection of declaration under section 106 (2) by the designated authority.
The Punjab and Haryana High Court in the Barnala Builders case , held, "We are unable to accept correctness of instructions issued by the Central Board of Excise and Customs, for the simple reason that after incorporation of the Service Tax Voluntary Compliance Encouragement Scheme into the Finance Act, all other provisions of the Act except to the extent specifically excluded, apply to proceedings under the scheme. The impugned order passed by the Deputy Commissioner of Central Excise and Service Tax would necessarily be appealable under Section 86 of the Indian Finance Act, 1994".
The good Board took the matter in appeal to the Supreme Court.
Now what would happen if the party had already filed the appeal and that was decided by the appellate authority, before the issue could be decided by the Supreme Court? That is exactly what happened.
When the case came up for hearing before the Supreme Court recently, the Court was informed that the appeal filed by the declarant was decided and the Revenue did not take up the matter further before the Tribunal. So as far as this assessee is concerned, the matter has attained finality and the Revenue appeal before the Supreme Court is only an academic issue.
But can an appeal be filed against an order of rejection under the VCES? The Supreme Court has left that issue open.