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2023 (3) TMI 953 - HC - Service TaxRejection of application to settle its dispute under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Renting of Immovable Property Service or not - It is Petitioner’s case that it did not pay service tax to Service Tax Authority under the belief that mere letting out was not a service - primary reason for disagreement is that Section 122 does not refer to VCES 2013 enactment and therefore, the order passed by the authority with reference to VCES is beyond the scope of the SVLDR Scheme. Whether the amounts demanded against the Petitioner are dues under the Finance Act, 1994 or not? HELD THAT:- VCES is part and parcel of the Finance Act, 1994, a statute which finds mention in Section 122 of the said Act. As can be seen from the facts of the case at hand, the Petitioner had obtained its Service Tax Registration under the Finance Act, 1994, the liability to pay service tax arose under the Finance Act, 1994, the show cause notice dated 17 April 2017 demanding the interest amount of Rs.2,78,90,766/- was issued to Petitioner under Section 75 of the Finance Act, 1994, which clearly stated that Petitioner had failed to pay minimum 50% of the declared tax dues on or before 31 December 2013 as required under the provisions of Section 107(3) of the Finance Act, 1994. There is, therefore, no doubt that the liability of the Petitioner had arisen under the Finance Act, 1994 which enactment finds mention under Section 122 of the said Act. Therefore, the ground for rejection of Petitioner’s second application that the VCES does not find mention as an enactment under Section 122 would therefore not survive. Coming to the observation of the Designated Authority that amount of duties having been paid, there is no duty pending recovery under the indirect tax enactments, we have already noted that in the facts of the case, the show cause notice demanding the interest amount was issued to Petitioner under Section 75 of the Finance Act, 1994 and which related to the service tax dues, which have admittedly been paid by Petitioner. Just because the Petitioner has paid the principal amount, it cannot be said that when a show cause notice has been issued for interest on the said amount, that the Petitioner is not entitled to make a declaration under SVLDRS. The interest relates to the service tax amount and the SVLDR Scheme covers not only tax but also interest, penalty - The Designated Authority ought to have considered the receipt of both these amounts while considering the application made by Petitioner. The order of the Designated Authority dated 6 February 2020 under SVLDR Scheme rejecting Petitioner’s SVLDRS-1 application dated 27 December 2019 is hereby quashed and set aside - Respondent no.2 Designated Authority is directed to consider the Petitioner’s SVLDRS-1 application dated 27 December 2019 afresh in the light of the above discussion within a period of four weeks from today and issue appropriate order / certificate. Petition allowed.
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