TMI Blog2020 (10) TMI 1135X X X X Extracts X X X X X X X X Extracts X X X X ..... nt No.3 to the petitioner quantifying the service tax liability for the period 1st April, 2016 to 31st March, 2017 at ₹ 47,44,937.00 which quantification is before the cut off date of 30 th June, 2019 and on the other hand for the second period i.e. from 1st April, 2017 to 30th June, 2017 there is a letter dated 18th June, 2019 of the petitioner addressed to respondent No.3 admitting service tax liability for an amount of ₹ 10,74,011.00 which again is before the cut off date of 30th June, 2019. Thus, petitioner s tax dues were quantified on or before 30th June, 2019 - there are no hesitation to hold that petitioner was eligible to file the application (declaration) as per the scheme under the category of enquiry or investigation or audit whose tax dues stood quantified on or before 30th June, 2019. Though the scheme 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, the primary focus as succinctly put across by the Hon ble Finance Minister in her budget speech is to unload the baggage of pending litigations in respect of service tax and central excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id service tax liability of ₹ 47,44,937.00 for the period 2016-17. Accordingly, petitioner was requested to immediately pay the service tax liability alongwith applicable interest and penalty. Petitioner was also requested to file the return for the year 2017-18 and to pay the service tax liability alongwith applicable interest and penalty. 5. It is stated that vide letter dated 18th June, 2019 issued by the petitioner to respondent No.3 petitioner stated about certain payments and claims for the year 2016-17 and admitted service tax liability of ₹ 10,74,011.00 for the period 1st April, 2017 to 30th June, 2017. 6. In the meanwhile, Central Government introduced the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (briefly the scheme hereinafter) to bring an end to pending litigations under the earlier indirect tax regime which now stood subsumed under the Goods and Services Tax (GST). 7. According to the petitioner, it filed electronic declaration on 12th December, 2019 i.e. Form No.SVLDRS 1 declaring an amount of ₹ 59,54,669.00 as the tax dues payable. The category under which the application (declaration) was filed was investigation, enquiry or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntified the amount payable at ₹ 47,44,937.00 for the period 201617 as previous liability was discharged by the petitioner. It is stated that petitioner vide the letter dated 18th June, 2019 accepted this liability for the period 2016-17 and on its own quantified its liability for the period 1st April, 2017 to 30th June, 2017 at ₹ 10,74,011.00 though petitioner did not submit necessary documents for verification and quantification of actual liability. 14. Referring to the scheme, it is stated that the scheme would cover those cases where investigation by the department was ongoing but the tax dues was quantified on or before 30th June, 2019. In cases where the tax dues were not quantified on or before 30th June, 2019, declarants of those cases were not eligible for filing declaration to avail the benefits under the scheme. 15. Respondents have pointed out certain discrepancies; in its application (declaration) dated 12th December, 2019 petitioner had declared its tax dues at ₹ 59,54,669.00 comprising of ₹ 47,44,937.00 for the period 2016-17 and ₹ 12,09,732.00 for the period 1st April, 2017 to 30th June, 2017; but the liability amount declared for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period 1st April, 2017 to 30th June, 2017, it is submitted that in its letter dated 18th June, 2019 petitioner had admitted the liability of ₹ 10,14,011.00 for the period 1st April, 2017 to 30th June, 2017. However, on account of calculation mistake petitioner had disclosed a higher amount of ₹ 12,09,732.00 for the said period in the application (declaration) which cannot be held against the petitioner. Referring to sub sections (3) and (4) of section 127 it is contended that the Designated Committee is required to grant personal hearing to a declarant before rejecting his application. 20. According to the petitioner, it had disclosed a higher figure of ₹ 59,54,669.00 while filing the declaration under the scheme and had already paid an amount of ₹ 30,60,257.00. Therefore, no further amount was payable by the petitioner under the scheme. Thus, the effect of the petitioner s mistake did not result in any amount becoming payable by the petitioner under the scheme. 21. Mr.Raichandani, learned counsel for the petitioner has elaborately taken us to the various provisions of the scheme. He has also referred to the circular dated 27th August, 2019. He con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urge the trade and business to avail this opportunity and be free from legacy litigations. 25. Statement of object and reasons with respect to the scheme reads as under :- 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. 26. Central Board of Indirect Taxes and Customs issued circular dated 27th August, 2019 informing all the Principal Chief Commissioners/Chief Commissioners/Principal Director Generals and Director Generals that the Central Government had announced the scheme as part of the union budget for the year 2019-20. The aforesaid authorities were also informed about notification of Sabka Vishwas (Leg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the smooth implementation of GST. Thus, the importance of making this scheme a grand success cannot be overstated. The Principal Chief Commissioners/Principal Directors General/ Chief Commissioners/Directors General and all officers and staff are instructed to familiarize themselves with this scheme and actively ensure its smooth implementation. 28. Before adverting to the relevant provisions of the scheme, we may also note that in Capgemini Technology Services India Limited Vs. Union of India, MANU/MH/1428/2020 , this Court after examining various provisions of the scheme held as under :- 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34. Reliefs available to a declarant under the scheme are provided in section 124. As per section 124(1)(d)(ii), where the tax dues are linked to an enquiry, investigation or audit against the declarant and the amount quantified on or before 30th June, 2019 is more than rupees fifty lakhs, then, fifty percent of the tax dues. 35. Section 125 deals with eligibility of persons to make a declaration under the scheme. Sub section (1) provides a negative list of persons ineligible to make a declaration. Except those persons, all other persons shall be eligible to make a declaration under the scheme. As per clause (e), a person who has 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 30th June, 2019 would not be eligible to make a declaration under the scheme. In other words, a person who has been subjected to an enquiry or investigation or audit and the amount of duty involved has not been quantified on or before 30th June, 2019 would not be eligible to make a declaration under the scheme in terms of sub section (1) of section 125. 36. At this stage, we may m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment under section 132, the Board has been conferred power under section 133 to issue orders, instructions and directions to various authorities for proper administration of the scheme and it shall be the duty of such persons employed in the execution of the scheme to observe and follow such orders, instructions and directions. 42. Central Government has framed the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 (briefly the Rules hereinafter) which has since been amended. As per Rule-3, the declaration made under sub section (1) of section 125 would be in form SVLDRS-1. Rule-6(3) says that the form issued by the Designated Committee under sub section (2) of section 127 shall be in form SVLDRS-2 mentioning the estimated amount payable by the declarant alongwith a notice of opportunity for personal hearing. As per sub rule (4), if the declarant waives personal hearing and indicates agreement or disagreement with the estimate made by the Designated Committee, he may file form SVLDRS-2A. Under Rule-6(2) when the amount estimated by the Designated Committee equals the amount declared by the declarant, Designated Committee shall issue form SVLDRS-3. Discharge certifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot quantified on or before 30th June, 2019, petitioner was not entitled to file application (declaration) under the scheme to avail the benefits. Accordingly, application of the petitioner was rejected. 45. After noticing the contours of the dispute, we may now examine the same. As per section 125(1)(e), a person who has 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 30th June, 2019, shall not be eligible to make a declaration under the scheme. In such a case tax dues has been defined under section 123(c) to mean, where an enquiry or investigation or audit is pending against the declarant, the amount of duty payable under any of the indirect tax enactment which has been quantified on or before 30th June, 2019. The word quantified has been defined in section 121(r) to mean a written communication of the amount of duty payable under the indirect tax enactment. 46. In so far the petitioner is concerned, there are two periods in question; first period is 1st April, 2016 to 31st March, 2017 and the second period is from 1st April, 2017 to 30th June, 2017. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts of the present case, we find that on the one hand there is a letter of respondent No.3 to the petitioner quantifying the service tax liability for the period 1st April, 2016 to 31st March, 2017 at ₹ 47,44,937.00 which quantification is before the cut off date of 30 th June, 2019 and on the other hand for the second period i.e. from 1st April, 2017 to 30th June, 2017 there is a letter dated 18th June, 2019 of the petitioner addressed to respondent No.3 admitting service tax liability for an amount of ₹ 10,74,011.00 which again is before the cut off date of 30th June, 2019. Thus, petitioner s tax dues were quantified on or before 30th June, 2019. 50. In that view of the matter, we have no hesitation to hold that petitioner was eligible to file the application (declaration) as per the scheme under the category of enquiry or investigation or audit whose tax dues stood quantified on or before 30th June, 2019. 51. We have already discussed that under sub sections (2) and (3) of section 127 in a case where the amount estimated by the Designated Committee exceeds the amount declared by the declarant, then an intimation has to be given to the declarant in the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to legacy disputes under central excise and service tax and to allow the business to make a fresh beginning. 53. Regarding the mistake in declaring the tax dues in the application (declaration) for the later period, we may mention that Gauhati High Court in Assam Cricket Association Vs. Union of India, MANU/GH/0280/2020 has taken the view that a bonafide and a curable mistake in making the declaration should be allowed to be rectified. In so far the present case is concerned, we have already noticed that because of the mistake in declaring the tax dues for the later period on the higher side; no benefit would accrue to the petitioner. Such a mistake could have been rectified had a hearing been given to the petitioner. 54. As discussed above, though the scheme 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, the primary focus as succinctly put across by the Hon ble Finance Minister in her budget speech is to unload the baggage of pending litigations in respect of service tax and central excise from pre-GST regime so that the business can move on. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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