TMI Blog2020 (10) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... It is not in dispute that the Petitioner is an eligible person. The Petitioner filed a declaration in Form SVLDRS-1 on 27-12-2019 as per Rule 3 of the SVLDRS Rules for relief under Section 124(1)(c)(ii) of the Finance (No.2) Act, 2019. Thereafter SVLDRS-2 was issued by the Designated Committee. As per Rule 6(3) of the SVLDRS Rules, this form is issued along with an estimate of the amount payable by the declarant along with notice of an opportunity for personal hearing. It is also not in dispute that Form SVLDRS-2 states that the estimated tax payable by the petitioner under the Scheme is ₹ 71,11,033.80 - If an opportunity for personal hearing as contemplated in Rule 6(3) of the SVLDRS Rules was given to the Petitioner pursuant to Form SVLDRS-2 with an estimate of an amount of ₹ 71,11,033.80 payable by the declarant, which amount has been accepted by the Petitioner pursuant to Form SVLDRS-2A in accordance with Rule 6(4) of the SVLDRS Rules, then, we do not see any reason as to why when the amount payable is sought to be enhanced from ₹ 71,11,033.80 to ₹ 2,19,82,499/- no such opportunity of hearing was granted to the Petitioner. If at all the Designated Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the principles of natural justice. The Petitioner is also challenging the inaction on the part of Respondents 3 and 4 in not disposing of the application filed by the Petitioner seeking rectification of the error in form SVLDRS-3 issued to the Petitioner. 4. The Petitioner is a company incorporated under the Companies Act, 1956 and is engaged, inter alia, in the business of providing services in the field of Information Technology Software Services such as software development, software support services and IT enabled services (i.e BPO services) primarily to customers located outside India. 5. The Respondent Nos.3 and 4 are members of the Designated Committee of Mumbai East Commissionerate, constituted under Section 126 of the Finance Act. 6. It is submitted on behalf of the Petitioner that it has units registered as Software Technology Park under the Software Technology Parks of India Scheme in accordance with provisions of Foreign Trade Policy and some other units of the petitioner are located inside the Special Economic Zones under the Special Economic Zone Act, 2005. It is submitted on behalf of the Petitioner that after its merger with IGate Global Solutions Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 2.93 Crores out of the total demand of ₹ 3.66 crores, the adjudicating authority had passed the order dated 28-03-2019 inter alia holding that the said payment of tax was not towards the training services received from CG SAS. Being aggrieved by the said order dated 28-03-2019, the Petitioner filed Appeal No. ST/87028/2019 under Section 86 of the Act on 12.07.2019. 8. It is submitted on behalf of the Petitioner that pending final hearing of the appeal, the Sabka Vishwas (Legacy Dispute Resolution) Scheme (the SVLDR Scheme ) was enacted vide Chapter V of the Finance Act after which the SVLDRS Rules were framed. It is submitted that the objective of the Scheme is to liquidate legacy cases of Central Excise and Service Tax that are subsumed in GST and are pending in litigation at various fora. On behalf of the Petitioner, it is submitted that under the SVLDR Scheme, amnesty is allowed by offering an opportunity to the tax payers to pay the outstanding tax and be free of any other consequences under the law. It is submitted that the Scheme was initially valid till 30-06-2019 and provides substantial relief in the tax dues for all categories of cases as well as full wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide its letter dated 13-03-2020 requesting the Designated Committee to issue revised Form SVLDRS-3 after granting the benefit of the amount of ₹ 2,47,85,775 deposited/pre-deposited by the Petitioner. Documentary evidence demonstrating the deposit of the aforesaid amount was also submitted subsequently. The Petitioner also sent emails dated 27-03-2020 and 01-04-2020 requesting the Designated Committee to issue revised Form SVLDRS-3 showing the estimated amount payable as ₹ 71,11,033.80. It is submitted that vide email dated 30-05-2020, Respondent no.3 directed the Petitioner to make the payment of amount due under the SVLDR Scheme in response to which the Petitioner requested for revised Form SVLDRS-3 after considering the rectification application, after which they would make payment. It is submitted that vide e-mail dated 09.06.2020, the Petitioner requested the Designated Committee to seek the verification report from the jurisdictional authority for verification of tax paid challan and issue revised Form SVLDRS-3 since the due date was 30.06.2020. The Petitioner made further request vide its e-mail dated 12-06-2020 to the Designated Committee to consider the rectif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 127 of the Finance Act (No.2) read with Rule 9 of the SVLDR Scheme at the aforesaid amount. 14. The Respondents have filed reply affidavit, inter alia, stating that the amount of ₹ 2,47,85,775/- claimed as pre-deposit does not clearly reflect that the same is in relation to the amount claimed by the Petitioner as pre-deposit. It is submitted that the two show-cause notices involved a period spread over 6 years from 2008-2009 to 2012-2013 and the reference of 63 challans spread over these 6 years cannot be specifically said to be towards payment of the particular arrears or pertaining to some other case or regular payment of some other unit and hence the deduction of ₹ 2,47,85,775/- from the total dues as claimed by the Petitioner is incorrect. It is also submitted that although the amount mentioned in SVLDRS-2 was ₹ 71,11,033/-, while issuing SVLDRS-3 the issue of eligibility of the amount of ₹ 2,47,85,775/- was considered which the Designated Committee did not find eligible based on the verification report furnished by the jurisdictional divisional office and therefore the SVLDRS-3 was issued for an amount of ₹ 2,19,82,499/-. It is also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Scheme is a one time measure for liquidation of past disputes of Central Excise and Service Tax as well as to ensure disclosure of unpaid taxes by a person eligible to make a declaration. The Scheme shall be enforced by the Central Government from a date to be notified. It provides that eligible persons shall declare the tax due and pay the same in accordance with the provisions of the Scheme. It further provides for certain immunities including penalty, interest or any other proceedings under the Central Excise Act, 1944 or Chapter V of the Finance Act, 1994 to those persons who pay the declared tax dues. 18. Chapter V of the Finance Act dealing with the SVLDR Scheme, inter alia, provides for the relief available under the Scheme, declaration to be made under the Scheme, verification of declaration by Designated Committee, issue of statement by Designated Committee, rectification of errors, issue of Discharge Certificate by Designated Committee, power to make rules, power to issue orders, instructions, etc. The relevant sections of the Scheme are quoted as under:- 124:- Relief available under Scheme :- (1) Subject to the conditions specified in sub-sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... All persons shall be eligible to make a declaration under this Scheme except the following, namely:- (a) who have filed an appeal before the appellate forum and such appeal has been heard finally on or before the 30th day of June, 2019; (b) who have been convicted for any offence punishable under any provision of the indirect tax enactment for the matter for which he intends to file a declaration; (c) who have been issued a show cause notice, under indirect tax enactment and the final hearing has taken place on or before the 30th day of June, 2019; (d) who have been issued a show cause notice under indirect tax enactment for an erroneous refund or refund; (e) who have been subjected to an enquiry or investigation or audit and the amount of duty involved in the said enquiry or investigation or audit has not been quantified on or before the 30th day of June, 2019; (f) a person making a voluntary disclosure,- (i) after being subjected to any enquiry or investigation or audit; or (ii) having filed a return under the indirect tax enactment, wherein he has indicated an amount of duty as payable, but has not paid it; (g) who have filed an appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reference or a reply to the show cause notice against any order or notice giving rise to the tax dues, before the appellate forum, other than the Supreme Court or the High Court, then, notwithstanding anything contained in any other provisions of any law for the time being in force, such appeal or reference or reply shall be deemed to have been withdrawn. (7) Where the declarant has filed a writ petition or appeal or reference before any High Court or the Supreme Court against any order in respect of the tax dues, the declarant shall file an application before such High Court or the Supreme Court for withdrawing such writ petition, appeal or reference and after withdrawal of such writ petition, appeal or reference with the leave of the Court, he shall furnish proof of such withdrawal to the designated committee, in such manner as may be prescribed, along with the proof of payment referred to in sub-section (5). (8) On payment of the amount indicated in the statement of the designated committee and production of proof of withdrawal of appeal, wherever applicable, the designated committee shall issue a discharge certificate in electronic form, within thirty days of the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a declaration may be made and the manner in which such declaration may be verified; (b) the manner of constitution of the designated committee and its rules of procedure and functioning; (c) the form and manner of estimation of amount payable by the declarant and the procedure relating thereto; (d) the form and manner of making the payment by the declarant and the intimation regarding the withdrawal of appeal; (e) the form and manner of the discharge certificate which may be granted to the declarant; (f) the manner in which the instructions may be issued and published; (g) any other matter which is to be, or may be, prescribed, or in respect of which provision is to be made, by rules. (3) The Central Government shall cause every rule made under this Scheme to be laid, as soon as may be after it is made, before each House of Parliament, while it is in session for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the rule or both Hous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... June, 2019; or (b) an amount in arrears; or (c) an enquiry or investigation or audit where the amount is quantified on or before the 30th day of June, 2019; or (d) a voluntary disclosure. Rule - 4. Auto acknowledgment.- On receipt of declaration, an auto acknowledgment bearing a unique reference number shall be generated by the system. Rule - 6. Verification by designated committee and issue of estimate, etc.- (1) The declaration made under section 125, except when it relates to a case of voluntary disclosure of an amount of duty, shall be verified by the designated committee based on the particulars furnished by the declarant as well as the records available with the Department. (2) The statement under sub-sections (1) and (4) of section 127, as the case may be, shall be issued by the designated committee electronically, on or before the 31st day of May, 2020 in Form SVLDRS-3 setting forth therein the particulars of the amount payable: Provided that no such statement shall be issued in a case where the amount payable, as determined by the designated committee is nil and there is no appeal pending in a High Court or the Supreme Court. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate under subsection (8) of section 127 within thirty days of the said payment and submission of the said proof, whichever is later: Provided that in a case where Form SVLDRS-3 has not been issued by the designated committee by virtue of the proviso to sub-rule (2) of rule 6, the discharge certificate shall be issued within thirty days of the filing of declaration referred to in sub-rule (1) of rule 3. 20. From the above, we find that as a one time measure for liquidation of past disputes of Central Excise and Service Tax, the SVLDR Scheme has been issued by the Central Government. The SVLDR Scheme has also been issued to ensure disclosure of unpaid taxes by an eligible person. This appears to have been necessitated as the levy of Central Excise and Service Tax has now been subsumed in the new GST Regime. From a reading of the statement of object and reasons, it is quite evident that the scheme conceived as a one time measure, has the twin objectives of liquidation of past disputes pertaining to central excise and service tax on the one hand and disclosure of unpaid taxes on the other hand. Both are equally important: amicable resolution of tax disputes and interest of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to in the Reply Affidavit on the basis of which From SVLDRS-3 for an amount of ₹ 2,19,82,499/- has been claimed to be issued, has admittedly not been shared with the Petitioner. If an opportunity for personal hearing as contemplated in Rule 6(3) of the SVLDRS Rules was given to the Petitioner pursuant to Form SVLDRS-2 with an estimate of an amount of ₹ 71,11,033.80 payable by the declarant, which amount has been accepted by the Petitioner pursuant to Form SVLDRS-2A in accordance with Rule 6(4) of the SVLDRS Rules, then, we do not see any reason as to why when the amount payable is sought to be enhanced from ₹ 71,11,033.80 to ₹ 2,19,82,499/- no such opportunity of hearing was granted to the Petitioner. If at all the Designated Committee wanted to increase the payable amount, the least they should have done was to give an opportunity of hearing to the Petitioner after affording the Petitioner an opportunity to review the report of the jurisdictional divisional commissioner. 22. With respect to the rectification application made by the Petitioner under Section 128 of the Finance Act, it has been stated by the Respondents in their reply that they have consid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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