2020 (11) TMI 845 - BOMBAY HIGH COURT - Service Tax

Head Note / Extract:
Rejection of Declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - direction to the respondents to consider afresh such application (declaration) as per the scheme - alleged non-payment of service tax dues pertain to the period from April, 2013 to June, 2017 - HELD THAT:- From a conjoint reading of sub sections (1), (2) and (3) of section 127, the picture that emerges is that if the amount estimated by the Designated Committee is equal to the amount declared by the declarant, then the Designated Committee shall issue a statement in electronic form indicating the amount payable by the declarant. However, if the amount estimated by the Designated Committee is higher than the amount declared by the declarant, the Designated Committee shall give an opportunity of hearing to the declarant - Once the determined amount is paid, discharge certificate is issued by the Designated Committee under sub section (8) of section 127. The proprietor of the petitioner in his statement recorded on 11.01.2018 by the investigating authority admitted the service tax liability of ₹ 60 lakhs (approximately) to be outstanding for the period from 2015-2016 to June, 2017. This was corroborated by the departmental authority in the letter dated 24.01.2018 which we have already noted and discussed. Therefore, present is a case where there is acknowledgment by the petitioner of the duty liability as well as by the department in its communication to the petitioner. Thus, it can be said that in the case of the petitioner the amount of duty involved had been quantified on or before 30.06.2019. In such circumstances, rejection of the application (declaration) of the petitioner on the ground of being ineligible with the remark that investigation was still going on and the duty amount was pending for quantification would not be justified. In a case where the amount estimated by the Designated Committee exceeds the amount declared by the declarant, then a hearing is given by the Designated Committee to the declarant before determining the amount to be paid by the declarant. In a situation where Designated Committee grants hearing to a declarant when the amount estimated by it exceeds the amount declared by the declarant, then it would be wholly inconceivable that before an application (declaration) is rejected on the ground of ineligibility, no hearing is granted to the declarant. Matter remanded back to the Designated Committee to consider afresh the application (declaration) of the petitioner dated 12.12.2019 as a valid declaration and grant the consequential relief after giving due opportunity of hearing to the petitioner, who shall be informed about the date, time and place of the hearing. Such decision shall be in the form of a speaking order with due intimation to the petitioner - petition allowed by way of remand.