TMI Blog2020 (11) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case as petitioner had filed appeal against the order-in-original before expiry of the limitation period. It was held in the case of Capgemini Technology Services India Limited [ 2019 (3) TMI 349 - BOMBAY HIGH COURT ] and Thought Blurb [ 2020 (10) TMI 1135 - BOMBAY HIGH COURT ] , declaration of the petitioner filed under the scheme on 23.12.2019 has to be construed to be one under the pending litigation category . The matter is remanded back to the Designated Committee to take a fresh decision as to the consequential relief to be granted to the petitioner, including refund of the amount paid by the petitioner, treating the declaration of the petitioner as one under the pending litigation category after affording reasonable opportunity of hearing to the petitioner - Petition allowed by way of remand. - WP-LD-VC-234 OF 2020 WRIT PETITION (L) NO. OF 2020 - - - Dated:- 5-11-2020 - UJJAL BHUYAN ABHAY AHUJA, JJ. Mr. Shrikant Kamat a/w. Som Sinha and Divya Vishwanath i/b. Som Sinha Associates for Petitioner. Mr. Pradeep S. Jetly, Senior Advocate a/w. Mr. Jitendra B. Mishra for Respondents. JUDGMENT and ORDER : (Per Ujjal Bhuyan, J.) Heard Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er has annexed two challans both dated 07.05.2014 evidencing appropriation of ₹ 17,94,402.00 by the service tax authorities. 3.4. Thus according to the petitioner, it had paid ₹ 2,80,74,255.00 on account of service tax dues prior to issuance of the show cause notice and a further amount of ₹ 17,94,402.00 was appropriated by the service tax authorities from the debtor s account, prior to and immediately preceding the show cause-cum-demand notice. 3.5. Commissioner of GST and Central Excise, Navi Mumbai passed the order-in-original on 18.09.2018 confirming service tax demand of ₹ 3,60,03,185.00 with interest and penalty. 3.6. Aggrieved by the aforesaid order-in-original, petitioner preferred an appeal before the Customs, Excise and Service Tax Appellate Tribunal, Mumbai Regional Bench, Mumbai (CESTAT) on 17.12.2018 in respect of which Diary No.901472018 was given. According to the petitioner it had deposited the requisite statutory fee of ₹ 10,000.00 along with the appeal vide two separate demand drafts of ₹ 5,000.00 each, one of which appeared to have been misplaced by the registry of CESTAT. Therefore, the appeal was kept aside as defect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,80,74,255.00 + ₹ 17,94,402.00). Thus, petitioner had paid much more than 50% of the tax demanded in the show cause notice. In such a case petitioner was not required to make any further payment of dues if the petitioner is construed to be a declarant under the pending litigation category . Therefore, the amount of ₹ 47,91,274.20 as determined by the Designated Committee was not required to be paid by the petitioner. 3.10. However, in spite of such submissions by the petitioner, Designated Committee issued the requisite form SVLDRS-3 re-stating the earlier position and directing the petitioner to pay ₹ 47,91,274.20. The said form was issued to the petitioner on 06.02.2020. 3.11. Since the scheme did not provide for any scope to a declarant to question such determination without paying the dues as determined, petitioner had no other alternative but to deposit the said amount of ₹ 47,91,274.20 on 05.03.2020. Thereafter the Designated Committee issued the discharge certificate in Form No.SVLDRS-4 on 06.03.2020 for full and final settlement of the tax dues under section 127 of the Act. 4. Aggrieved by the aforesaid, present writ petition has been filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad no option but to consider the amount of ₹ 2,80,17,728.00 as pre-deposit. 5.3. In the circumstances, respondents submit that there is no merit in the writ petition which should accordingly be dismissed. 6. Submissions made by learned counsel for the parties are on pleaded lines. Therefore, a detailed reference to the same is considered not necessary. However, the submissions so made have received the due consideration of the Court. 7. Short point for consideration is whether petitioner's application (declaration) under the scheme should be construed as one under the 'pending litigation category' or under the 'arrears category'? Ancillary to the above question would be the question as to whether petitioner should have the benefit of relief as a declarant under the pending litigation category and thus entitled to refund of the amount paid? 8. To answer the above questions, it would be apposite to briefly highlight only those portions of the scheme which are relevant and necessary for adjudication of the present lis. 9. Sections 120 to 135 form part of Chapter V of the Act which deals with the scheme. Section 125 deals with eligibility to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but not paid it; 11.1. In other words, amount in arrears would mean the amount of duty which is recoverable as arrears of duty under the concerned indirect tax enactment (in this case, service tax) on account of no appeal having been filed by the declarant against the order-in-original or against the order-in-appeal before the expiry of the timeline for filing appeal or further appeal; or the order-in-appeal relating to the declarant had attained finality; or in a case where the declarant had filed return on or before 30.06.2019 admitting the tax liability but had not paid the same. 12. According to the petitioner, if its application (declaration) is treated to be one under the 'pending litigation category', it would not be required to make any further payment even though respondents accepted ₹ 2,80,17,728.00 as the pre-deposit made by the petitioner instead of ₹ 2,98,68,657.00 claimed by the petitioner, omitting from consideration the amount of ₹ 17,94,402.00 appropriated by the service tax authorities from the account of the petitioner's debtor i.e., M/s. Future Retail Limited. 13. In a proceeding under Article 226 of the Constitution of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the CESTAT on 09.12.2019 holding that the appeal filed by the petitioner was not maintainable and accordingly was not entertained. 16. Stand taken by the respondents is that since the appeal was not admitted and was ultimately not entertained on 09.12.2019, which was to the knowledge of the petitioner when it had filed the application (declaration) under the scheme on 23.12.2019, it could not be construed that the appeal of the petitioner was pending as on 30.06.2019; rather in such a scenario it would be a case under the arrears category . 17. We have already noticed the language of sections 123(a), 124(1) (a) and 125(1)(a). That the petitioner was eligible to make a declaration is acknowledged by the respondents though they contend it was rightfully classified under the arrears category and not under the pending litigation category . When the respondents have acknowledged that petitioner was eligible to make the declaration, it would mean that it was not ineligible under section 125(1)(a). In other words, it would mean that respondents have accepted the position that petitioner had filed an appeal before the appellate forum but that appeal was not finally heard on or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scheme, statement of objects and reasons as well as circular dated 27.08.2019 of the Central Board of Indirect Taxes and Customs and held as under:- 24. Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (already referred to as the scheme herein-before) was introduced by the Finance (No.2) Act, 2019 and notified in the Gazette of India, Extraordinary on 1st August, 2019. While proposing the scheme as part of her budget speech for the year 2019-20, Hon ble Finance Minister, Government of India stated thus :- GST has just completed two years. An area that concerns me is that we have huge pending litigations from pre-GST regime. More than ₹ 3.75 lakh crore is blocked in litigations in service tax and excise. There is a need to unload this baggage and allow the business to move on. I, therefore, propose, a Legacy Dispute Resolution scheme that will allow quick closure of these litigations. I would 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervice tax which have been subsumed under GST and to allow business to make a new beginning and to focus entirely on GST. It was emphasized that all officers and staff should partner with trade and industry to make the scheme a grand success. It was highlighted that dispute resolution and amnesty are the two components of this scheme. The dispute resolution component is aimed at liquidating the legacy cases whereas the amnesty component gives an opportunity to those who have failed to correctly discharge their tax liability to pay the tax dues. After saying so, the Board concluded as under :- 12. The Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 has the potential to liquidate the huge outstanding litigation and free the taxpayers from the burden of litigation and investigation under the legacy taxes. The administrative machinery of the Government will also be able to fully focus on helping the taxpayers in 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 fami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o unload the baggage of pending litigations centering around service tax and excise duty. Therefore the focus is to unload this baggage of pre-GST regime and allow business to move ahead. We are thus in complete agreement with the views expressed by the Delhi High Court in Vaishali Sharma Vs. Union of India, MANU/DE/1529/2020 that a liberal interpretation has to be given to the scheme as its intent is to unload the baggage relating to legacy disputes under central excise and service tax and to allow the business to make a fresh beginning. 53. * * * * 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. This was also the view expressed by the Board in the circular dated 27 th August, 2019 wherein all the officers and staff working under the Board were called upon to partner with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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