The Department of Posts could not pay its service tax because of "unwarranted refusal" by the officials concerned who did not exercise their discretionary power in letting it pay the levy through cheque.
The Service Tax Rules, 1994, stipulate that while every assessee shall pay the levy electronically through Internet banking, the jurisdictional deputy/assistant commissioner may for reasons to be recorded in writing allow the assessee to deposit service tax through any other mode.
"In spite of these provisions, the Department of Posts (DoP) has informed that in certain jurisdictions, officers are not allowing them permission to pay by cheque," said a communication from the Central Board of Excise and Customs (CBEC) to its senior officials.
DoP has been refused permission by Controller General of Accounts to open a current account, which in any case would have allowed electronic payment.
"Under the circumstances, they can make a payment by cheque only," CBEC said.
The Board, tasked with the responsibility to collect indirect taxes, including service tax, further said the assessee in question is a government department and "the question of jeopardy to revenue cannot exist".
It noted that refusing permission to DoP amounts to "expecting them to comply with the law while simultaneously preventing them from doing so".
"The purpose of giving discretion in the law gets defeated," CBEC noted while directing officials concerned to use powers vested in them "judiciously and rationally".
Accordingly, whether it is Department of Posts or any other assessee, CBEC "directed" that discretion vested in the jurisdictional deputy/assistant commissioners should be exercised judiciously and rationally.
Also, the supervisory officers should, from time to time, check such exercises of discretion so that there are no "unwarranted refusals", CBEC added.
The Service Tax Rules, 1994, stipulate that while every assessee shall pay the levy electronically through Internet banking, the jurisdictional deputy/assistant commissioner may for reasons to be recorded in writing allow the assessee to deposit service tax through any other mode.
"In spite of these provisions, the Department of Posts (DoP) has informed that in certain jurisdictions, officers are not allowing them permission to pay by cheque," said a communication from the Central Board of Excise and Customs (CBEC) to its senior officials.
DoP has been refused permission by Controller General of Accounts to open a current account, which in any case would have allowed electronic payment.
"Under the circumstances, they can make a payment by cheque only," CBEC said.
The Board, tasked with the responsibility to collect indirect taxes, including service tax, further said the assessee in question is a government department and "the question of jeopardy to revenue cannot exist".
It noted that refusing permission to DoP amounts to "expecting them to comply with the law while simultaneously preventing them from doing so".
"The purpose of giving discretion in the law gets defeated," CBEC noted while directing officials concerned to use powers vested in them "judiciously and rationally".
Accordingly, whether it is Department of Posts or any other assessee, CBEC "directed" that discretion vested in the jurisdictional deputy/assistant commissioners should be exercised judiciously and rationally.
Also, the supervisory officers should, from time to time, check such exercises of discretion so that there are no "unwarranted refusals", CBEC added.
Source:-The Economic Times
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