VCES Scheme - Can designated authority recall VCES 3?
THE litigation surrounding VCES scheme 2013 is continuing. While the response to the Scheme was not that encouraging, revenue did their best to see that the assessees who came forward and filed VCES declarations do not get the immunity. In an interesting case, after Show Cause Notice was issued by the Additional Commissioner (after the cutoff date of 01.03.2013), an assessee filed declaration in VCES 1 with the Designated Authority (Deputy Commissioner) and also obtained VCES 2. He paid the tax dues and informed the same to the Additional Commissioner. However, while adjudicating the Show Cause Notice, the Additional Commissioner held that the assessee is not eligible for VCES and confirmed the demand with interest and penalties. The assessee filed appeal before the Commissioner (Appeals). When the appeal is pending,the assessee received VCES 3 (Acknowledgement of Discharge) from the Designated Authority. The assessee during the hearing with Commissioner (Appeals), informed the fact of receiving the VCES 3. When the Commissioner (Appeals) called for a clarification from the Designated Authority, he addressed a letter to the assessee, stating that the VCES 3 issued may be treated as void ab initio. He also informed the same to the Commissioner (Appeals) stating that the VCES 3 issued to the assessee may be treated as null and void as the Additional Commissioner had already held the assessee ineligible for VCES.
After carefully examining the records, the Commissioner (Appeals) held such rejection of VCES declaration is not sustainable and set aside the letter issued by the Designated authority withdrawing VCES 3.