The Bombay High court has held that the benefit of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme) cannot be denied merely for mentioning higher figures in application by way of abundant caution.
The bench of Justice M. S. Sonak and Justice Jitendra Jain has observed that in the course of the enquiry / investigation, the Petitioner has admitted its liability of Rs.1,39,58,752 and,therefore, the Petitioner is eligible for availing the benefit of the Scheme. Merely because a higher figure is mentioned in the application by way of abundant caution, the Petitioner cannot be deprived of the benefit of theScheme more so, when the object of the Scheme is to reduce the litigation. It is also important to note that the Petitioner is not seeking refund of any amount paid or payable on the basis of his declaration of Rs.1,50,37,871.
Table of Contents
Background
The Petitioner/assessee has challenged rejection of its application filed under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme) on the ground that since the quantification of demand is made after 30 June 2019, Petitioner is not eligible to avail the benefit of the Scheme.
The Petitioner made an application in Form SVLDRS-1 for availing the benefit of the SVLDR Scheme and in the Form amount of Rs.1,50,37,871/- was mentioned as duty quantified. The figure by way of abundant caution was taken from the show cause notice although lesser amount was admitted in investigation.
The department issued Form SVLDRS-2 rejecting the application on the ground that the quantification of the amount is post 30 June 2019 and, therefore, the Petitioner is not eligible for availing the benefit of the SVLDR Scheme. It is on this backdrop that the present petition is filed by the Petitioner challenging the rejection of its application under SVLDR Scheme.
Arguments
The assessee contended that the quantification has been admitted by the Petitioner in the course of the investigation proceedings wherein a sumof Rs.1,39,58,752/- has been admitted as service tax liability for the period 2014 to 2017. In the show cause notice,the relevant quantification made by the Petitioner in the course of the investigation has been reproduced. Since the quantification is done in the course of the investigation prior to 30 June 2019, the Petitioner is eligible to avail the benefit of the Scheme.
The assessee submited that the Petitioner by way of abundant caution in his application stated the figure as the disputed amount which was picked up from the show cause notice. It is his submission that in the application he has disclosed more than what was required as per the Scheme and, therefore, he should not be penalised by rejecting the application. He is not seeking refund of the amount payable on the difference of Rs.1,50,37,871/- and Rs.1,39,58,752/-.
The department contended that since the figure mentioned in the application is based on the show cause notice which was issued post 30 June 2019, the Petitioner is not eligible as per Section 125 of the SLVDR Scheme and, therefore, justifies the order of the rejection passed by the Respondents. No other submission has been made by the department.
Relevant Provisions
Section 121 (r) of the Scheme defines “quantified” to mean a written communication of the amount of duty payable under the indirect tax enactment. The said definition does not state who is required to quantify.
Therefore, even if an assessee admits in the course of investigation prior to 30 June 2019 and arrived at the quantification same would fall within the meaning of the term “quantified” as defined.
Section 125 of the SVLDR Scheme provides for the eligibility except the exclusion. One of the exceptions under Section 125(1)(e),, is where a person has been subjected to an enquiry or investigation or audit and the amount of duty involved has not been quantified on or before 30 June 2019. TheMinistry of Finance by its clarification dated 27 August 2019 in paragraph 10(g) clarified that the duty liability admitted by the person during enquiry, investigation or audit quantified before 30 June 2019 would be eligible under the Scheme.
Conclusion
The court held that in the course of the investigation, the Petitioner has quantified the service tax liability ofRs.1,39,58,752. The quantification was also communicated to the department prior to 30 June 2019.
The court held that the rejection of the Petitioner’s application is unjustified and, therefore, the impugned communication dated 12 February, 2020 is quashed and set aside.
The court directed the department to accept the applicationof the Petitioner made in Form SVLDRS-1 at page 143 of the petition and inform the Petitioner of any amount due and payable, if any, under the SVLDR Scheme within a period of four weeks from the date ofuploading the present order.
The court directed the Petitioner to pay the amount so determined, if any, within a period of four weeks and inform the Respondents about the payment. On receipt of the communication of payment having been made, the Respondents would issue the final certificate under Section 127 of the Scheme.
Case Details
Case Title: Kuber Health Food And Allied Services Pvt. Ltd Versus UOI
Case No.: Writ Petition No.611 Of 2023
Date: 22/11/2024
Counsel For Petitioner: Shreyas Shreevastava
Counsel For Respondent: Kavita Shukla
