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TMI Blog2021 (2) TMI 980X X X X Extracts X X X X X X X X Extracts X X X X ..... prayer made is for a direction to the respondents not to proceed with the show cause notice dated 30.12.2020 issued by respondent No.6. 3. Petitioner No.1 is a company incorporated under the Companies Act, 1956 and is engaged in the business of providing manpower recruitment and payroll processing services. Petitioner No.2 is a director of petitioner No.1. Being a service provider, petitioner No.1 got itself registered as a service provider under the Finance Act, 1994. 4. It is stated that because of severe financial crisis and other difficulties, petitioners could not discharge their erstwhile service tax liability and the subsequent goods and services tax (GST) liability to the tune of Rs. 11.1 crores approximately till February, 2018. In this connection, two summons were issued to the petitioners both dated 30.03.2018. Responding to the summons, petitioner No.2 appeared before the Superintendent in the office of the Directorate General of Goods and Services Tax Intelligence (DGGSTI), Zonal Unit, Mumbai on 30.03.2018. On that date his statement was recorded under section 14 of the Central Excise Act, 1944 read with section 174 of the Central Goods and Services Tax Act, 2017 (b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioners were advised that their declaration may be rejected as the amount of service tax liability was shown as Rs. 5,16,24,145.00 whereas as per the admission of petitioner No.2 dated 30.03.2018, the service tax liability was approximately Rs. 6 crore. In such circumstances, petitioners submitted another declaration in the prescribed form on 10.01.2020. 10. Be that as it may, by a written communication dated 12.02.2020 respondent No.4 rejected the declaration of the petitioners dated 27.11.2019 on the ground that quantification of service tax liability was not made final by 30.06.2019. On similar ground, the second declaration dated 10.01.2020 was also rejected by respondent No.4 on 08.06.2020. 11. Aggrieved, present writ petition has been filed seeking the reliefs as indicated above. 12. Respondent Nos. 2, 3 and 4 have filed a common affidavit. Firstly, it has been explained as to why rejection order dated 12.02.2020 had to be issued in physical form as it is stated that there was some technical issue in the portal of the scheme which necessitated issuing of order in physical form. It is stated that verification regarding the outstanding service tax dues of the petitioners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions made by the 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. 16. Issue raised in the present writ petition i.e. eligibility of the petitioners or maintainability of the declaration to avail the benefits of the scheme under the category of investigation, enquiry or audit on the ground that service tax dues of the petitioners for the related period was not quantified on or before 30th June, 2019 is no longer res-integra. 17. In Thought Blurb Vs. Union of India 2020-TIOL-1813-HC-MUM-ST, this court faced with a similar issue referred to provisions of the Finance (No.2) Act, 2019 and to the circular dated 27th August, 2019 of the Central Board of Indirect Taxes and Customs (briefly "the Board" hereinafter) whereafter it was held as under :- "47. Reverting back to the circular dated 27th August, 2019 of the Board, it is seen that certain clarifications were issued on various issues in the context of the scheme and the rules made thereunder. As per paragraph 10(g) of the said circular, the following issue was clarified in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscussed. Therefore, present is a case where there is acknowledgment by the petitioner of the duty liability as well as by the department in its communication to the petitioner. Thus, it can be said that in the case of the petitioner the amount of duty involved had been quantified on or before 30.06.2019. In such circumstances, rejection of the application (declaration) of the petitioner on the ground of being ineligible with the remark that investigation was still going on and the duty amount was pending for quantification would not be justified. 28. This position has also been explained by the department itself in the form of frequently asked questions (FAQs). Question Nos.3 and 45 and the answers provided thereto are relevant and those are reproduced hereunder :- "Q3. If an enquiry or investigation or audit has started but the tax dues have not been quantified whether the person is eligible to opt for the Scheme? Ans. No. If an audit, enquiry or investigation has started, and the amount of duty/duty payable has not been quantified on or before 30th June, 2019, the person shall not be eligible to opt for the Scheme under the enquiry or investigation or audit category. 'Qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty admitted by the person concerned during enquiry, investigation or audit or audit report and not necessarily the amount crystalized following adjudication. Thus, petitioner was eligible to file the declaration in terms of the scheme under the category of enquiry or investigation or audit as its service tax dues stood quantified before 30.06.2019." 20. From the above it is evident that all that would be required for being eligible under the above category is a written communication which will mean a written communication of the amount of duty payable including a letter intimating duty demand or duty liability admitted by the person concerned during inquiry, investigation or audit. For eligibility under the scheme, the quantification need not be on completion of investigation by issuing show-cause notice or the amount that may be determined upon adjudication. 21. In so far the present case is concerned, there is no dispute that petitioner No.2 in his statement made before the Directorate General of GST Intelligence on 30.03.2018 had admitted service tax liability to the extent of Rs. 6 crore approximately. This was accepted by the respondents and in the subsequent communications ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Finance (No.2) Act, 2019, circular of the Board dated 27.08.2019 and answers to question Nos. 3 and 45 of the Frequently Asked Questions, a view can legitimately be taken that the requirement under the scheme is admission of tax liability by the declarant during inquiry, investigation or audit report. It is not necessary that the figures on such admission should have mathematical precision or should be exactly the same as the subsequent quantification by the authorities in the form of show-cause notice etc. post 30.06.2019. The object of the scheme is to encourage persons to go for settlement who had bonafidely declared outstanding tax dues prior to the cut off date of 30.06.2019. The fact that there could be discrepancy in the figure of tax dues admitted by the person concerned prior to 30.06.2019 and subsequently quantified by the departmental authorities would not be material to determine eligibility in terms of the scheme under the category of inquiry, investigation or audit. What is relevant is admission of tax dues or duty liability by the declarant before the cut off date. Of course the figure or quantum admitted must have some resemblance to the actual dues. In our vi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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