Dismissed

M/S. Kasmisons Builders Pvt. Ltd. v. Assistant Commissioner, Service Tax Division

Kerala HC22 Feb 2016WP(C)/1093/2016

Case brief

AI extract

What is this about?

The High Court dismissed the writ petition challenging an order denying the petitioner the benefit of the Voluntary Compliance Encouragement Scheme, 2013, due to a six-day delay in paying the second tranche of tax dues. The Court held that the scheme is an amnesty agreement requiring strict adherence to timelines, and thus the petitioner was ineligible.

What did the court decide?

Petitioner denied benefit of Voluntary Compliance Encouragement Scheme due to non-compliance with payment deadline; application dismissed.

M/S. Kasmisons Builders Pvt. Ltd. Vs Assistant… — Customs and Excise | Kerala HC (2016)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR

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MONDAY, THE 22ND DAY OF FEBRUARY 2016/3RD PHALGUNA, 1937

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WP(C).No. 1093 of 2016 (J)

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PETITIONER :

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-----------------

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M/S. KASMISONS BUILDERS PVT. LTD. KASMISONS ARCADE, 2ND FLOOR, M.G ROAD, KOCHI 682 031, REPRESENTED BY MANAGING DIRECTOR.

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BY ADVS.SRI.ANIL D. NAIR SRI.R.SREEJITH SMT.O.A.NURIYA KUM.SOUMYA PRAKASH KUM.MEKHALA M.BENNY

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RESPONDENTS :

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--------------------

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1. ASSISTANT COMMISSIONER, SERVICE TAX DIVISION CENTRAL EXCISE BHAVAN, KOCHI 17.

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2. SUPERINTENDENT OF CENTRAL EXCISE

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SERVICE TAX E RANGE, CENTRAL EXCISE BHAVAN, KOCHI 17.

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R1 & R2 BY ADV. SRI.RANJITH JACOB KOSHY, SC, BY SRI.THOMAS MATHEW NELLIMOOTTIL,SC,

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THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 22-02-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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WP(C).No. 1093 of 2016 (J)

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APPENDIX

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PETITIONER(S)' EXHIBITS

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EXHIBIT P1: COPY OF THE FORM VCES-1 DECLARATION FILED BY THE PETITIONER.

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EXHIBIT P2(A): COPY OF THE E-RECEIPT FOR SERVICE TAX PAYMENT OF RS.3,10,470.

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EXHIBIT P2(B): COPY OF THE E-RECEIPT FOR SERVICE TAX PAYMENT OF RS.94,470.

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EXHIBIT P2(C): COPY OF THE E-RECEIPT FOR SERVICE TAX PAYMENT OF RS. 29.473.

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EXHIBIT P3: COPY OF THE FORM VCES-2 DECLARATION FILED BY THE PETITIONER.

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EXHIBIT P3(A): COPY OF THE E-RECEIPT FOR SERVICE TAX PAYMENT OF RS. 3,43,070.

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EXHIBIT P3(B): COPY OF THE E-RECEIPT FOR SERVICE TAX PAYMENT OF RS. 1,04,390.

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EXHIBIT P3(C): COPY OF THE E-RECEIPT FOR SERVICE TAX PAYMENT OF RS.32,568.

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EXHIBIT P4: COPY OF THE ORDER DATED 27.2.15 ISSUED BY THE 2ND RESPONDENT.

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EXHIBIT P5: COPY OF THE REPLY LETTER DATED 2.3.15 SUBMITTED BY THE PETITIONER TO THE RESPONDENT.

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EXHIBIT P6: COPY OF THE ORDER DATED 23.6.15 ISSUED BY THE 2ND RESPONDENT.

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RESPONDENT(S)' EXHIBITS

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EXT.R1: WPC NO. 7000/2014 OF THE HONOURABLE HIGH COURT OF KERALA

//TRUE COPY//

P.A. TO JUDGE

A.K.JAYASANKARAN NAMBIAR, J. ............................................................. W.P.(C).No.1093 Of 2016

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............................................................. Dated this the 22^nd day of February, 2016

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J U D G M E N T

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The challenge in the writ petition is against Ext.P6 communication issued to the petitioner by the 2^nd respondent whereby the petitioner was informed that, on account of a delayed payment of the amount under the Voluntary Compliance Encouragement Scheme, 2013, the petitioner would be denied the benefit of the said Scheme, and recovery of service tax dues for the period April 2008 to March 2015 would be effected against the petitioner. In the writ petition, the petitioner would submit that as against an amount of Rs.8,68,821/- that the petitioner was required to pay by way of tax dues under the VCES Scheme of 2013 for the period from April 2008 to December 2012, he had paid 50% of the tax dues amounting to Rs.4,34,413/- vide Challan Nos.306, 312 and 323 dated 30.12.2013, and the balance amount of 50% together with interest thereon was paid by him only on 06.01.2015. It is stated that while he had paid the first tranche of 50% within the time contemplated under the Scheme, he had paid the second

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W.P.(C). No.1093 of 2016

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tranche of 50%, together with interest, only with a marginal delay of six days from the date fixed under the Scheme. It is his contention therefore that for this marginal delay he should not be denied the substantive benefit that was offered to assessees under the VCES Scheme, 2013. The learned counsel for the respondent would vehemently oppose the grant of any indulgence to the petitioner, on the contention that the VCES Scheme, 2013, is in the nature of an Amnesty Scheme that affords defaulting assessees an opportunity to pay the tax amount without any penal interest within the specified time under the Scheme so as to get the benefit of waiver of prosecution and penalty. It is his contention, therefore, that the provisions of the VCES Scheme, 2013 have to be strictly construed in favour of the revenue and against the assessee.

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I have heard the learned counsel for the petitioner and the learned Standing Counsel appearing on behalf of the respondents.

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On a consideration of the facts and circumstances of the case and the submissions made across the bar, I find that, it is not in dispute that the petitioner had complied with the requirements

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W.P.(C). No.1093 of 2016

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of the Scheme with regard to the payment of the first tranche of 50% of the tax due from him. As regards the second tranche comprising of the balance 50%, the petitioner had chosen to pay the amount beyond June 2014, and therefore, became liable to pay the differential amount together with interest, on or before 31.12.2014. As against this, the petitioner could effect the payment only by 06.01.2015. The issue to be considered in this writ petition is whether, for the mere delay of six days in effecting payment of the balance 50% under the VCES Scheme, 2013, the petitioner could be denied the benefit of the Scheme in toto. It is the submission of learned counsel for the petitioner, relying on the decisions of the Supreme Court rendered in the context of interpretation of exemption provisions under a taxing statute, that while the general rule is that an exemption provision under a taxing statute should be strictly construed against an assessee and in favour of the revenue, the strict interpretation would apply only to ascertain whether the petitioner is entitled to the benefit of the exemption. It is his contention that once the petitioner is found entitled to the benefit of the exemption, then the exemption notification has to be interpreted widely so as to try and retain the petitioner within the benefit of the exemption that was contemplated under the notification. Per contra, the learned

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W.P.(C). No.1093 of 2016

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counsel for the respondents would submit that the VCES Scheme, 2013, is in the nature of an Amnesty Scheme and it is not akin to an exemption notification granted under a taxing statute. It is his case that since the Scheme contemplates an Amnesty to a defaulting assessee and clothes him with an immunity against penalty and prosecution, on complying with the conditions of the Scheme, the provisions have to be strictly interpreted in favour of the revenue and against the assessee.

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On a consideration of the rival contentions, I am of the view that the decisions relied upon by counsel for the petitioner, that deal with interpretation of exemption notifications, cannot strictly be applied on the facts of the instant case. The VCES Scheme, 2013, is in the nature of an Amnesty Scheme and, therefore, its provisions have to be strictly interpreted, and the time limit specified in the Scheme for the payment of amounts together with interest have to be strictly adhered to. The scheme partakes of the nature of a settlement between the assessee and the department and from the terms of the settlement neither party can be permitted to resile. To allow the petitioner to effect payments belatedly would tantamount to altering the terms of the settlement and that cannot be done by this Court in exercise of its powers

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W.P.(C). No.1093 of 2016

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under Art. 226 of the Constitution of India In the instant case, although the delay occasioned by the petitioner is only of six days from the cut off date mentioned under the Scheme, it has to be borne in mind that the actual amount to be paid under the Scheme was to be paid on or before June 2014 and the extension of time from June 2014 to 31^st December, 2014, itself was by way of an exception to the main provisions so as to enable a defaulter to pay the amounts that fell due by June 2014, on or before 31.12.2014, by paying the same together with interest thereon. In the instant case, the petitioner did not effect payment of the amounts even before the extended date of 31.12.2014. Under the said circumstances, I am of the view that the petitioner cannot claim the benefit of the VCES Scheme, 2013. The writ petition therefore fails and is accordingly dismissed.

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A.K.JAYASANKARAN NAMBIAR JUDGE

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mns/22.02.16

M/S. Kasmisons Builders Pvt. Ltd. v. Assistant Commissioner, Service Tax Division

Case brief

What is this about?

What did the court decide?

M/S. Kasmisons Builders Pvt. Ltd. v. Assistant Commissioner, Service Tax Division

Case brief

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