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2020 (1) TMI 1368 - HC - Service TaxSabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - tax dues to be quantified on or before 30.06.2019 - maintainability of declaration made under the category of investigation, enquiry or audit under the scheme - Board s circular dated 27.08.2019 - HELD THAT - There was a clear admission on the part of the petitioner as to its service tax liability and such admission was prior to the cut off date of 30.06.2019. There is admission by the petitioner that the amount of service tax liability for the related period was ₹ 1,26,54,725.00 on 28.06.2019 which was before the cut off date of 30.06.2019 - As held in SAKSHAM FACILITY SERVICES PRIVATE LIMITED VERSUS UNION OF INDIA AND OTHERS 2020 (12) TMI 318 - BOMBAY HIGH COURT the work quantified appearing in the scheme would mean a written communication of the amount of duty payable which would include a letter intimating duty demand or duty liability admitted during enquiry, investigation, audit or audit report and not necessarily the amount crystallized following adjudication - In so far the letter dated 06.09.2019 is concerned, the same was only in reiteration of the admission made by the proprietor on 28.06.2019. Further, such an admission is to be examined not for the purpose of investigation into alleged tax evasion but for the purpose of eligibility under the scheme. Respondents were not justified in rejecting the declaration of the petitioner under the scheme on the ground that quantification of tax dues was not made final on or before 30.06.2019 - Matter is remanded back to respondent Nos.2 and 3 to consider the declaration of the petitioner as a valid declaration under the category of investigation, enquiry or audit in terms of the scheme and after giving due opportunity of hearing grant the consequential relief(s) to the petitioner - Petition allowed by way of remand.
Issues Involved:
1. Eligibility under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. 2. Quantification of tax dues before the cut-off date of 30.06.2019. 3. Rejection of the declaration based on non-finalization of tax dues by the cut-off date. Detailed Analysis: 1. Eligibility under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019: The petitioner sought quashing of the rejection of its declaration under the Sabka Vishwas Scheme and requested reconsideration after a hearing. The petitioner, a proprietorship firm providing construction services, claimed exemption from service tax under an amended Exemption Notification dated 20.06.2012. However, the Service Tax Department initiated an enquiry for the period 2014-15 to June 2017, asserting that the services were taxable post-amendment from 01.04.2015. 2. Quantification of Tax Dues Before the Cut-off Date of 30.06.2019: The petitioner admitted a service tax liability of ?1,26,54,725.00 in a statement recorded on 28.06.2019. The Sabka Vishwas Scheme, introduced by the Central Government in 2019, required tax dues to be quantified by 30.06.2019 for eligibility. The petitioner submitted a declaration under the scheme on 21.11.2019, but it was rejected on 12.02.2020 because the tax dues were not finalized by the cut-off date. 3. Rejection of the Declaration Based on Non-finalization of Tax Dues by the Cut-off Date: The respondents contended that the quantification of tax dues was not finalized by 30.06.2019, making the petitioner ineligible under the scheme. The petitioner’s declaration was based on a statement recorded just two days before the deadline, which the respondents argued was insufficient time for finalizing the tax liability. The High Court referred to previous judgments, including Thought Blurb Vs. Union of India and M/s. G. R. Palle Electricals Vs. Union of India, which clarified that "quantified" means a written communication of the amount of duty payable, including a letter intimating duty demand or duty liability admitted during enquiry, investigation, or audit. The Court noted that the petitioner’s tax liability was admitted on 28.06.2019, before the cut-off date, thus fulfilling the scheme's requirements. Conclusion: The Court concluded that the petitioner’s admission of tax liability on 28.06.2019 met the scheme's criteria. The rejection of the declaration was unjustified as the tax dues were quantified before the cut-off date. The impugned order dated 12.02.2020 was set aside, and the matter was remanded for reconsideration of the petitioner’s declaration as a valid one under the scheme. The respondents were directed to complete this process within six weeks, ensuring due opportunity of hearing. Order: The Writ Petition was allowed, and the respondents were instructed to act on a digitally signed copy of the order. No costs were awarded.
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