Decided on March 20,2019

Crescent Epc Projects And Technological Services Ltd Appellant
UNION OF INDIA Respondents


V. Ramasubramanian, J. - (1.)Aggrieved by the rejection of their application under the Voluntary Compliance Encouragement Scheme, 2013 (hereinafter referred to as 'VCES') and a consequential demand made, the assessee of Service Tax under the Finance Act, 1994 has come up with the above writ petition.
(2.)Heard Mr. A.R. Madhav Rao Mihir Gupta, learned counsel appearing for Mr. Avinash Desai, learned counsel for the petitioner, Mr. K.Lakshman, learned Assistant Solicitor General, appearing for the 1st respondent-Union of India, Mr. B. Narasimha Sarma, learned Senior Counsel appearing for the respondents 2 to 4 and Mr. P. Sri Harsha Reddy, learned counsel appearing for the 4th respondent/ Garnishee.
(3.)On the ground that there were 17 lakhs registered assesses of service tax, but only 7 lakhs assessees out of them were filing returns and that therefore, a step towards motivating the remaining assessees to file returns and to pay the taxes due, was essential, the Government introduced a one-time scheme known as VCES, in the budget of 2013. This scheme was introduced in the form of Chapter-VI of the Finance Act, 2013 (for short 'the Act'). This chapter comprised of Sections 104 to 114. Section 106 laid down the eligibility criteria for a person who can make a declaration under the Scheme. It reads as follows:
"106. (1) Any person may declare his tax dues in respect of which no notice or an order of determination under section 72 or section 73 or section 73A of the Chapter has been issued or made before the 1st day of March 2013:

Provided that any person who has furnished return under Section 70 of the Chapter and disclosed his true liability, but has not paid the disclosed amount of service tax or any part thereof, shall not be eligible to make declaration for the period covered by the said return:

Provided further that where a notice or an order of determination has been issued to a person in respect of any period on any issue, no declaration shall be made of his tax dues on the same issue for any subsequent period.

(2) Where a declaration has been made by a person against whom,--

(a) an inquiry or investigation in respect of a service tax not levied or not paid or short-levied or short-paid has been initiated by way of

(i) search of premises under section 82 of the Chapter; or

(ii) issuance of summons under section 14 of the Central Excise Act, 1944 (1 of 1944), as made applicable to the Chapter under section 83 thereof; or

(iii) requiring production of accounts, documents or other evidence under the Chapter or the rules made thereunder; or

(b) an audit has been initiated,

And such inquiry, investigation or audit is pending as on the 1st day of March, 2013, then, the designated authority shall, by an order, and for reasons to be recorded in writing, reject such declaration."


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