P. Jagdish Murthy vs. Union Of INDIA

Held

The Court allowed the writ petition. It relied on the Gujarat High Court's judgment in *Sadguru Construction Co. v. Union of India*, which had interpreted the Service Tax Voluntary Compliance Encouragement Scheme, 2013. The Gujarat High Court held that payments made between March 1, 2013, and May 10, 2013, were eligible for declaration under the scheme, as the definition of 'tax dues' in Section 105(1)(e) of the Finance Act, 2013, only excluded taxes paid before March 1, 2013. The revenue conceded that no appeal was filed against the Gujarat High Court's verdict, and it attained finality. The Court found it impermissible for the revenue to adopt a different interpretation of the same scheme. Therefore, the order of the Deputy Commissioner was set aside, and the petitioner's application was to be processed afresh in light of the Gujarat High Court's interpretation within eight weeks.

Facts

The petitioner filed an application under the Service Tax Voluntary Compliance Encouragement Scheme, 2013, on December 12, 2013, for the period April 2007 to December 2012, declaring tax dues of Rs. 1,66,840. The scheme required payment of at least 50% of tax dues by December 31, 2013, and the balance by June 30, 2014. The petitioner paid Rs. 60,000 on March 8, 2013, and Rs. 30,000 on November 5, 2013, with the balance paid on June 28, 2014. The Deputy Commissioner rejected the application, citing Clause 5 of Para 2 of Circular No. 174/9/2013-ST dated November 25, 2013, and holding that the payment of Rs. 60,000 made before the scheme's commencement date (May 10, 2013) could not be considered under the scheme, thus failing the 50% payment requirement by December 31, 2013.

Key Issues

1. Whether payments made before the commencement date of the Service Tax Voluntary Compliance Encouragement Scheme, 2013 (May 10, 2013), but after March 1, 2013, can be considered as part of the 'tax dues' for the purpose of a declaration under the scheme, as per Section 105(1)(e) of the Finance Act, 2013? Petitioner's contention: The petitioner argued that the Gujarat High Court in *Sadguru Construction Co. v. Union of India* had held that payments made between March 1, 2013, and May 10, 2013, should be covered for declaration under the scheme, as the definition of 'tax dues' only excluded taxes paid before March 1, 2013. The petitioner relied on this judgment. Revenue's contention: The revenue, represented by the Deputy Commissioner's order, contended that payments made before the scheme's effective date of May 10, 2013, could not be accepted as payments made under the scheme, and therefore, the petitioner failed to meet the 50% payment requirement by December 31, 2013.