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TMI Blog2023 (5) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... of "ineligibility" with the remarks, "incomplete and selective declaration". 2. According to the respondents, the designated authority had, on examination of the petitioner's application, noticed the following: 2.1 The petitioner had wrongly availed cess amounting to Rs.3,16,946/- in TRAN-1. The petitioner had reversed the said amount on 31.03.2019 but the interest amounting to Rs.83,231/- along with penalty was recoverable from the petitioner; 2.2 The petitioner had deposited the service tax amount of Rs.92,385/, which was found due on ST-3 reconciliation but had not deposited the interest and penalty; 2.3 The petitioner had wrongly availed the Cenvat Credit amounting to Rs.8,05,654/- on services relating to rent a cab, medical insurance, and hotel accommodation, which was deposited by the petitioner but the interest and penalty remained outstanding; and 2.4 The petitioner had wrongfully availed the Cenvat Credit amounting to Rs.82,81,915/- on exempted income under Rule 6(3) of the Cenvat Credit Rules, 2004. The petitioner had deposited the said amount but the applicable interest and penalty was outstanding. 3. According to the respondents, the petitioner's declaration subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he wrongful availment of cess; Rs.36,250/-, as interest on the short payment of service tax; Rs.6,52,133/- as interest on the wrongful availment of the Cenvat Credit on services relating to rent a cab, medical insurance and hotel accommodation; and interest amounting to Rs.50,85,903/-, on account of interest on the Cenvat Credit availed on exempted income. 8. The petitioner responded to the said letter by a letter dated 26.06.2019. The petitioner referred to a meeting with the Additional Commissioner, CGST and claimed that there was a consensus that if the petitioner deposited the excess cess, shortfall in payment of service tax, and wrongful availment of the Cenvat Credit before 31.03.2019, the interest and penalty relating to the same would be waived. Insofar as the non-reversal of the Cenvat Credit on exempted receipt is concerned, the petitioner contended that the grant-in-aid was for general purpose and had no relation with the services received. The petitioner did not agree with the Revenue's contention that the Cenvat Credit proportionate to the grant received from the Government was required to be reversed. Notwithstanding the same, the petitioner stated that it had decide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... small taxpayers of their pending disputes with the tax administration. Government urges the taxpayers and all concerned to avail the Sabka Vishwas - Legacy Dispute Resolution Scheme, 2019 and make a new beginning." 14. The Finance Minister of India, in her speech in the Parliament while presenting the Union Budget for the year 2019-2020, had expressed concern regarding the huge backlog of pending litigation from the pre-GST (Goods and Service Tax) regime. She had stated that more than Rs.3.75 lakh crore was blocked in litigation relating to indirect taxes, which required to be resolved for businesses to move on. The objective of the SVLDR Scheme was to enable a quick closure of pending litigation centering around indirect taxes. It was considered expedient to enact the SVLDR Scheme to enable businesses to continue under the GST regime without any baggage of prior litigation or disputes regarding indirect taxes. Section 122 of the Act enumerated twenty-nine separate enactments, which were covered under the SVLDR Scheme. In addition, the Central Government was also empowered to include, by a notification in the official gazette, any other enactment under the SVLDR Scheme. 15. Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here the amount estimated to be payable by the declarant, as estimated by the designated committee, equals the amount declared by the declarant, then, the designated committee shall issue in electronic form, a statement, indicating the amount payable by the declarant, within a period of sixty days from the date of receipt of the said declaration. (2) Where the amount estimated to be payable by the declarant, as estimated by the designated committee, exceeds the amount declared by the declarant, then, the designated committee shall issue in electronic form, an estimate of the amount payable by the declarant within thirty days of the date of receipt of the declaration. (3) After the issue of the estimate under sub-section (2), the designated committee shall give an opportunity of being heard to the declarant, if he so desires, before issuing the statement indicating the amount payable by the declarant: Provided that on sufficient cause being shown by the declarant, only one adjournment may be granted by the designated committee. (4) After hearing the declarant, a statement in electronic form indicating the amount payable by the declarant, shall be issued within a period of si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ates 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, within a period of sixty days from the date of receipt of the declaration under sub-rule (1) of rule 3, 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. (3) Where the amount estimated to be payable by the declarant exceeds the amount declared by the declarant, then, the designated committee shall issue electronically, within thirty days of the date of receipt of the declaration under sub-rule (l) of rule 3, in Form SVLDRS-2, an estimate of the amount payable by the declarant along with a notice of opportunity for personal hearing. (4) If the declarant wants to indicate agreement or disagreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er had deposited the tax dues prior to 31.03.2019. Thus, there was no amount payable after the tax relief. There is no cavil that the application filed by the petitioner correctly disclosed that there was no amount of tax dues payable by it. The only controversy is that the petitioner had declared the duty amount as Rs.82,81,915/- and had also indicated that the same amount had been deposited. The error on the part of the petitioner is that it did not include the duty amount, which related to the other three audit objections in the column of duty details and the duty paid. Clearly, this error was a curable one and did not affect the estimation of the amount payable after availing the benefit under the SVLDR Scheme. The petitioner had, in the course of proceedings prior to the SVLDR Scheme coming into force, paid the tax in respect of the said audit observations and had sought waiver of interest and penalty, which it claimed, was acceded to by the concerned Additional Commissioner, CGST. 25. In Thought Blurb v. Union of India & Ors.: 2020 SCC OnLine Bom 11719, the Division Bench of the Bombay High Court had examined the legislative intent of the SVLDR Scheme and had held that the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner to pay the interest and penalty, it had unequivocally expressed its intention to apply under the SVLDR Scheme. It had subsequently done so. Concededly, in terms of the SVLDR Scheme, the petitioner would be entitled to the waiver of interest and penalty as it had paid the requisite tax prior to the stipulated date. There is no dispute that the amount as estimated to be payable - that is, tax dues less relief - is nil. It is also not disputed that the petitioner would not have benefited in any manner by not disclosing the aforestated amounts. In the given circumstances, we are of the view that rejection of the petitioner's application is arbitrary and unreasonable and, thus, offends Article 14 of the Constitution of India. 27. As noted above, the legislative intent to enact the SVLDR Scheme was to include all taxpayers for offloading the baggage of disputes. All taxpayers, except those which were specifically excluded, were entitled to avail the benefit of the said Scheme. The SVLDR Scheme also covered cases where no disputes were pending and enabled the taxpayers to voluntarily pay taxes and avail amnesty under the SVLDR Scheme. 28. Given the nature of the SVLDR Scheme, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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