- (1.) This appeal has been preferred by the Commissioner of Service Tax Commissionerate, Kolkata challenging the judgment dated 3rd April, 2014 passed in W.P. 10245(W) of 2014 (Parijat Vyappar Private Ltd. and Anr. v. Union of India and Ors.)
(2.) It appears that the writ petitioner no. 1, a company incorporated under the Companies Act, 1956, having service tax registration under Chapter V of Finance Act, 1994 and the petitioner no. 2, a director of the petitioner no. 1, moved a writ petition affirmed on 31st March, 2014 upon notice to the appellant herein. Prayers in the writ petition, relevant for consideration, are as under : "(a) A writ and/or in the nature of Mandamus be issued commanding the respondents, their men, servants, agents or assigns to forthwith :- (i) Quash, rescind, recall, set aside, cancel and/or revoke the impugned Authorization of Arrest dated January 17, 2014; (ii) Refrain from giving any effect and/or further effect and from taking any steps and/or further steps pursuant to the declaration made by the petitioner under the Service Tax Voluntary Compliance Encouragement Scheme, 2013 and the Finance Act, 2013 ; (iii) Declaration declaring the petitioner to be eligible under the Service Tax Voluntary Compliance Encouragement Scheme, 2013 and the Finance Act, 2013 and to be entitled to the benefits under the Scheme for payment of the balance 50% of the declared tax dues ; (iv) Declaration that the petitioner is entitled to adjustment and/or deduction of its Income Tax Refund from the payments to be made under the Scheme of 2013 ; (v) Direct the respondent No. 3 herein, to accept the payments to be made by the petitioner as payments towards the balance of the 50% of the tax dues under the Scheme of 2013 ; (vi) Refrain the respondent authorities from refusing to allow the eligibility and benefits to the petitioner under the Scheme of 2013 ; (vii) Treat the petitioner to be eligible under the Scheme of 2013 ; (viii) restraining the respondents, their men, agents, servants and assigns from giving any effect and/or further effect and/or taking any steps or further steps pursuant to the declaration given by the petitioner under the Scheme of 2013 and in directing the respondent No. 3 to accept all payment made by the petitioner towards the declaration of tax dues as payment under the Scheme of 2013. (d) An order of injunction be passed restraining the respondents, their men, agents, servants and assigns from giving any effect and/or further effect and/or taking any steps or further steps pursuant to the declaration given by the petitioner under the Scheme of 20132 and in directing the respondent No. 3 to accept all payment made by the petitioner towards the declaration of tax dues as payment under the Scheme of 2013."
(3.) The writ petition was moved and disposed of by the judgment under challenge, the relevant portion of which is set out hereunder : "At the time of moving the writ petition a point of law arose relating the interpretation of Section 107 and Section 110 of the Service Tax Voluntary Compliance Encouragement Scheme, 2013 and the respective Advocates have addressed the Court on the point of law. Since the facts are not disputed, this Court proceeded to decide the writ petition on the question of law agitated by the respective counsels. My endeavour has failed to find out from the provision of the said scheme that once a default is committed for non-compliance of the provisions contained therein relating to the deposit, the declarant shall be thrown outside the ambit of the said scheme and shall be thrown in the pool of chapter containing the service tax. Section 110 of the said Act clearly indicates that in the event of the default of the payment either fully or in part, the balance amount would be recovered by taking recourse to Section 87 of the Finance Act. It is tried to be contended by the respondent that Section 102 which contemplates for removal of doubts makes it abundantly clear that the immunity provided under the scheme would not be available to the declarant who committed default for compliance of the conditions relating to the deposit of tax dues. On meaningful reading of the provisions contained therein it appears that the immunity as to any benefit, concession or immunity granted under Section 96 shall not be available to the defaulting declarant. The aforesaid provisions have to be read conjointly with section 110 of the said Act. If default is committed under the scheme the consequences provided in the scheme is to be adhered to and the authority cannot travel beyond the boundaries set therein. The benefit under the scheme is provided to a person against whom no enquiry or investigation or other proceeding are initiated. Section 106 of the said Act makes the position clear and, therefore, the person who voluntarily declare his liability to pay service tax, if commits defaults in complying the provisions contained under the said scheme, the authorities are bound to take action under the provisions which provides for the steps to be taken for non-compliance of any of the provisions of the said scheme. To sum up, this Court must conclude that the proviso is applicable only in respect of Sub-section (4) of Section 107 and cannot be stretched to Subsection (3) of Section 107. The authorities can take recourse under Section 110 of the said Act, in the event any default is committed under the scheme. With these observations, this Court dispose of this writ petition.";