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2022 (7) TMI 307 - HC - Service TaxValidity of statement issued in prescribed form SVLDRS 3 - tax liability that was due and payable - setting off of amounts already paid towards tax - Seeking declaration that the impugned statement is ultra vires section 66B of the Finance Act 1994 - seeking declaration that impugned statement violates the provisions of Articles 14, 19 (1) (g), 265 and 300A of the Constitution - HELD THAT:- While there is no dispute about the fact that the petitioner falls under the voluntary disclosure category and that it has deposited before the scheme kicked in i.e., 01.09.2019, amounts towards tax liability, which included the relevant period, the contesting respondents i.e., respondent nos. 2 to 4, refused to take cognizance of the same, as the designated committee under the proviso appended to sub-section (1) of section 126 is not empowered to verify the declaration made concerning the ‘amount of duty’ set forth by the declarant in the prescribed form i.e., SVLDRS-1. The submission of the contesting respondents is that the petitioner cannot go beyond the purview of the scheme, and if the argument of the petitioner is accepted, that there is an ambiguity in the scheme, since it is akin to a beneficial legislation, the provisions of the scheme ought to be interpreted in a manner that favours the revenue, as against the declarant. The expression “tax dues” involves a combination of two words “tax” and “dues” - while the term/word “tax” is commonly understood as meaning imposition of a governmental charge on persons, properties, entities, and transactions to yield public revenue. The word “dues” would be something which is owed or payable (in the context of present matter, tax) constituting a debt2. Therefore, when the words tax and dues are read conjointly, it could only mean imposition of charge which is owed and payable and thus, by necessary implication, would exclude tax liability which is already discharged and/or paid - therefore, the expression “total amount of duty” in clause (d) of section 123 of the 2019 Act, in our opinion, could only mean the total amount of outstanding duty payable by a declarant making voluntary disclosure, as it could never have been intended by the legislature that the revenue would collect and/or recover tax liability which has already been discharged by the declarant. The obvious intent of the legislature in forging the scheme under the 2019 Act is to encourage assessees to make a clean breast of their affairs and resultantly, extend the necessary benefits to the revenue by adding to their financial wherewithal, sans the attendant difficulties and costs that would otherwise have to be incurred to initiate of recovery and legal proceedings - the only caveat that one needs to enter at this stage (and something that does not arise for consideration in this case), is that if a declarant has made a pre-deposit or other deposits which exceed the amount payable, as indicated in the statement issued by the designated committee, the said amount shall not be refunded as per provisions of sub-section (2) of section 130 of 2019 Act. In the instant case, the pre-deposit made by the petitioner is less than the amount stated in the impugned statement and therefore, in this matter, the petitioner steers clear of the aforesaid provision - the construction of provisions of section 123 (d) cannot enure to the benefit of the revenue. Thus, it would suffice if a direction is issued, quashing the impugned statement dated 12.02.2020, and consequentially respondent no. 4 be called upon to issue a fresh statement in the prescribed form i.e., SVLDRS-3, after taking into account the pre-deposit made by the petitioner towards tax liability, as indicated in its declaration made in the form SVLDRS-1 - petition disposed off.
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