By TIOL News Service

MUMBAI, NOV 28, 2018: THE petitioner, on 23/12/2013, filed a form VCES-1 being a declaration under section 107(1) of the Finance Act, 2013.

The declaration covered the period April, 2010 to December, 2012 in which an unpaid tax of Rs.4,73,527/- was disclosed.

Incidentally, the said "unpaid tax" amount included a sum of Rs.1,32,842/- which the declarant had already paid.

Contending that the actual tax liability would be Rs.3,40,686/-, the applicant- petitioner deposited with the Revenue the installments as per the terms of the scheme of settlement.

The Assistant Commissioner, however, did not accept this plea of the Petitioner. He was of the opinion that Petitioner himself had made a declaration of Rs.4,73,527/-. The Petitioner could have but had not asked for the amendment of the declaration. In absence of any such amendment the Petitioner had to pay the installments as per the declared tax dues of Rs.4,73,527/-, the Asstt. Commissioner observed.

In fine, the application was rejected.

The High Court considered the submissions and observed thus -

+ The Assistant Commissioner does not dispute the Petitioner's assertions that not the tax of Rs.4,73,527/-, but sum of Rs.3,40,686/- was outstanding. The declaration included a payment of Rs.1,32,841/- previously made. If that was the case, the Assistant Commissioner ought to have considered the correct figure of tax dues.

+ He could not have enforced the Petitioner's declaration which was factually erroneous. Even if the declaration required an amendment, the Petitioner had under his letter dated 27th December, 2013 brought the correct facts to the notice of the Departmental Authorities. Such letter could have been treated as a request for amending the declaration. Nothing is brought to our notice to suggest that such amendment application had to be filed in a particular format. Even if so, the same would be a purely procedural aspect.

+ If we allow the order of the Assistant Commissioner to stand, it will result into gross injustice. In sub-paragraph (II) of the operative portion of the order, the Assistant Commissioner has ordered recovery of the declared sum with interest and penalty. This would mean the entire amount of Rs.4,73,527/- would become recoverable with penalty and interest though, undisputed by the department, out of the said sum, Rs.1,32,841/- has already been paid over by the Petitioner earlier. The Government-Revenue cannot recover any tax without authority of law.

The impugned order was set aside and the authority was directed to grant the benefit of the VCES, 2013 to the petitioner.

(See 2018-TIOL-2474-HC-MUM-ST)