The Mumbai Bench of Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ) has held that the Taxing statutes should be interpreted strictly.
The appellant McKinsey & Co. was engaged in providing Management Consultant’s services. the appellant paidexcess service tax during the period June, 2012 for the period April to June, 2012 and later on after more than two years they adjusted the said excess payment for the period April to June, 2014 by disclosing it in their ST-3 return. the appellant was asked to pay the amount alongwith interest and penalty.
Archit Agarwal,who appeared for the assessee submitted that the adjustment was done in conformity with the provisions of Rule 6(4A). He further submitted that the term ‘succeeding month or quarter’ used in Rule 6(4A) could not be interpreted as only immediately succeeding month or quarter since such a narrow interpretation was not permissible in law. He further submitted that the word ‘succeeding month’ was not accompanied by the word ‘immediate’ and hence it did not necessarily mean that the adjustment was required to be made in the month immediately succeeding the month in which the excess tax was paid.
Sunil Kumar Katiyar, who appeared for the revenue submitted that if any excess payment had made then the appellant ought to have informed the department with relevant details which they failed to do rather after almost 2 ½ years they suo motu made the adjustment of the alleged excess amount paid which is contrary to the provisions of Rule 6(4A) & 6(4B). He further submitted that the Appellant had failed to furnish any documentary evidence in support of their claim of excess payment.
A single Bench of Ajay Sharma Member (Judicial Member) held that the Taxing Statute must be interpreted in the light of what is clearly expressed, could not imply anything which was not expressed nor can it merge provisions in the statute so as to supply any assumed deficiencies.
The bench observed that “A perusal of the Rule 6(4A) would make it clear that the word used is succeeding month or quarter as the case may be. Succeeding month denotes the month, which succeeds the current month, i.e., the next month and dictionary meaning of succeeding means immediately following. The aforesaid clause (4A) does not use the word ‘any’ before the words ‘succeeding month or quarter’ as the case may be. Rule 6(4B) provides that the adjustment shall be subject to this condition that the excess amount paid was not on account of taxability.”
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