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November 2013

2013-TIOL-741-HC-ALL-ST M/s. K Anand Caterers vs. Union of India

By Puloma Dalal, Jayesh Gogri, Mandar Telang, Chartered Accountants
Reading Time 1 mins
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Whether recovery proceedings be initiated where the assessee has applied under the Voluntary Compliance Encouragement Scheme, 2013 (VCES)? Held, No.

Facts:

The department conducted a search in the applicant’s premise on 31-05-2013 and detected payment of Rs. 60 lakh against service tax dues and thus issued a notice for recovery dated 07-06-2013. The applicant did not deny the liability but applied under VCES on 20-06-2013. The department contended that it was within its rights to initiate recovery proceedings and to issue a notice for the same and further stated that unless the application was found to be valid the petitioner was not entitled to any relief against the said dues. Held: Observing that the applicant had fulfilled the conditions as prescribed for application under VCES, the Hon. High Court held that unless the application was considered and decided by the Competent Authority, no recovery proceedings would be allowed to continue. They further stated that if the recovery was allowed to proceed, the object behind VCES would be defeated.

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