The Kerala High Court recently held that the benefit of Voluntary Compliance Encouragement Scheme, 2013 cannot be denied to the assessee on the ground of technical defects in the declaration made in connection with the said scheme.
In the instant case, the assessee, a Local Self Government Institution under the Kerala Municipality Act did not obtain registration under the Act nor did they pay the service tax. Subsequently, the Central Government introduced the Scheme vide Finance Act, 2013 for settlement of the pending service tax liability of taxpayers covered by the Act for the period from 2007-2008 to 2012-2013. As per the scheme, the taxpayers are exonerated from the liability to pay interest for delayed payment.
In terms of the provisions of the scheme, the petitioner made a declaration for availing benefit of the said scheme. The same was rejected by the respondent-authorities pointing out a defect in the same.
Granting relief to the petitioners, Justice P.B Suresh Kumar said that “Insofar as the Finance Act, 2013, does not deal with the amendment of the declaration made under the Scheme and insofar as provision was made for the said purpose in terms of a Circular, I am of the view that denial of the benefits of the Scheme to the petitioner merely for the reason that the petitioner has not furnished the amended declaration within the time stipulated in terms of the Circular is unjust, unfair and unreasonable.”
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