2023 (10) TMI 233 - HC - Service Tax

Seeking extension of time period for payment of dues under SVLDR Scheme - HELD THAT - What is evident is that the petitioner was under a misconceived belief that by virtue of extension of limitation periods by virtue of the orders of the Hon ble Supreme Court the same benefit would be available to the petitioner under the Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 (the Sabka Vishwas Scheme). The declarations were filed in respect of Service Tax liability declared in the periodical ST-3 returns but not paid and therefore they were declarations filed under the category of arrears. The last date for payment of the estimated dues for settlement of the case was 30.06.2020 and the amounts were not paid until such date - As per Rule 7 the amount had to be credited in the account on or before 30.06.2020. The petitioner made the first claim of pre-deposit only by a letter dated 7.06.2021 after almost one year of the last date for making payment under the scheme which was clearly beyond the outer limit of the operation of the scheme. In the case of M/S Yashi Constructions vs. Union Of India 2022 (3) TMI 110 - SC ORDER the Supreme Court held that the High Court has rightly refused to grant relief to the petitioner for extension of the period to make the deposit under the Scheme. It is a settled proposition of law that a person who wants to avail the benefit of a particular Scheme has to abide by the terms and conditions of the Scheme scrupulously. If the time is extended not provided under the Scheme it will tantamount to modifying the Scheme which is the the prerogative of the Government. Thus if the case of the petitioner is accepted then it would tantamount to modifying the scheme which cannot be done. Petition dismissed.

Summary

Issues Involved:
1. Eligibility of the petitioner under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
2. Consideration of pre-deposit amounts already paid by the petitioner.
3. Impact of COVID-19 pandemic on the timelines for payment under the scheme.

Summary:

Issue 1: Eligibility of the petitioner under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019

The petitioner filed a petition under Article 226 of the Constitution of India seeking reliefs related to the Sabka Vishwas Scheme. The petitioner, engaged in the business of washing and dry cleaning services, faced delays in filing ST-3 returns for the periods between October 2014 and March 2017. The petitioner argued eligibility under Section 125 of the Finance Act, 2019, which specifies that any amount paid as pre-deposit at any stage of appellate proceedings should be deducted when issuing the statement indicating the amount payable by the declarant. The court noted that the petitioner filed five declarations under the scheme for different periods but did not pay the declared service tax liability by the due date of 30.06.2020.

Issue 2: Consideration of pre-deposit amounts already paid by the petitioner

The petitioner contended that an amount of Rs. 27,93,323/- paid during the period 2014-15 to 2017-18 should be considered as a pre-deposit. The petitioner claimed that the Chartered Accountant had filed the declarations without adjusting the already deposited amount. The respondents, however, did not consider this amount while issuing Form SVLDRS-3, resulting in a payable amount of Rs. 39,14,954/-. The court observed that the petitioner's belief that the pre-deposit would be adjusted was misconceived and that no declaration regarding pre-deposit was made at the time of filing.

Issue 3: Impact of COVID-19 pandemic on the timelines for payment under the scheme

The petitioner argued that the COVID-19 pandemic and subsequent orders by the Supreme Court extending limitation periods should apply to the payment timelines under the Sabka Vishwas Scheme. The court, however, clarified that the Supreme Court's orders on extending limitation periods were applicable to judicial or quasi-judicial proceedings and not to the due dates for payment under the scheme. The petitioner's first claim of pre-deposit was made by a letter dated 07.06.2021, almost a year after the last date for making payment under the scheme, which was beyond the permissible limit.

Conclusion:

The court concluded that accepting the petitioner's case would amount to modifying the scheme, which is not permissible. Citing the Supreme Court's decision in M/S Yashi Constructions vs. Union Of India, the court emphasized that the terms and conditions of the scheme must be adhered to strictly. Consequently, the petition was dismissed, and any interim relief was vacated.