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2021 (2) TMI 1259 - HC - Service TaxRejection of application filed under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - seeking rectification of the alleged mistake apparent from the records - HELD THAT - The Petitioner had already filed an Application for rectification of alleged mistake under Section 74 of the Chapter V of the Finance Act 1994 on 13/07/2018. It is not in dispute that the Assessing officer has rejected the said application on 20/02/2019. On 08/04/2019, the Petitioner preferred an Appeal under Section 85 of the said Finance Act 1994 much prior to Notification issued by the Central Government on 01/09/2019 introducing the said Scheme. It is not disputed by the Respondents that against an assessment Order, an assessee can file an application for rectification under Section 74 of the Finance Act 1994. The said application for rectification filed under Section 74 came to be rejected by the assessing officer. It is not in dispute that the said Order passed by the Assessing Officer refusing to allow application for rectification filed under Section 74 was appealable under Section 85 of the Finance Act 1994. The said appeal was admittedly pending as on 30/06/2019 - if the said application for rectification would have been allowed partly or fully by the assessing Officer, under Section 74 (7), the assessing officer was required to give effect and implement the said Order, if any, on the application for rectification. A perusal of the said Section 74 (7), indicates that where any such amendment has the effect of enhancing the (liability of the assessee) or reducing the refund already made, the (Central Excise Officer) shall make an order specifying the sum payable by the assessee and the provisions of said chapter shall apply accordingly. It is clear beyond reasonable doubt that any Order allowing the said application for rectification partly or fully would modify the Order in original passed by the Assessing Officer in pursuance of show cause notice issued by the assessing Officer. Such Order of rectification has to be read with the Order in Original. The said Order is also appealable under Section 85 of Finance Act, 1994 - In this case the Petitioner had already filed the appeal against the Order passed by the Assessing Officer under Section 74 of the Finance Act, 1994 rejecting the application for rectification. There is no merit in the submission of the Mr. Mishra, the learned counsel for the Respondents that the declaration form filed by the Petitioner could only fall under arrears category within the meaning of Section 121 (c) on the ground that the Petitioner had not filed any appeal against the Order in original. The view taken by the respondents is not only contrary to various principles of law laid down by this Court in catena of decisions referred to aforesaid but also contrary to the objects and intent of the Central Government in introducing the said scheme for the benefit of the assessee and to bring them out of litigation forever pending under pre-GST regime. The view taken by the respondents thus deserves to be quashed and set aside with the order of remand. The impugned Order dated 06/03/2020 passed by the Designated Committee requiring the Petitioner herein to pay the amount of ₹ 13,18,433.20/- placing the declaration form submitted by the Petitioner under arrears category is quashed and set aside - declaration form SVLDRS filed by the Petitioner on 15/01/2020 is to be placed before the Designated Authority. The designated authority is directed to consider the said declaration under litigation category and shall issue discharge Certificate within 30 days from the date of the Petitioner paying the amount as reflected in SVLDRS-1 - Petition allowed.
Issues Involved:
1. Eligibility of the Petitioner to file a declaration under the "Litigation Category" of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. 2. Definition and interpretation of "Order" under Section 121(o) of the said Scheme. 3. Definition and interpretation of "Appellate Forum" under Section 121(f) of the said Scheme. 4. Definition and interpretation of "amount in arrears" under Section 121(c) of the said Scheme. 5. Compliance with principles of natural justice. Issue-Wise Detailed Analysis: 1. Eligibility of the Petitioner to file a declaration under the "Litigation Category" of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019: The Petitioner sought to file a declaration under the "Litigation Category" of the Sabka Vishwas Scheme. The Designated Committee, however, placed the declaration under the "Arrears Category," requiring the Petitioner to pay ?13,18,433.20/-. The Court noted that the Petitioner had filed an appeal under Section 85 of the Finance Act, 1994, which was pending as of 30/06/2019. According to Section 125(1) of the Scheme, persons with pending appeals as of 30/06/2019 are eligible to file under the "Litigation Category." Therefore, the Petitioner was eligible to file under the "Litigation Category." 2. Definition and interpretation of "Order" under Section 121(o) of the said Scheme: The Petitioner argued that the definition of "Order" under Section 121(o) includes orders passed on applications for rectification under Section 74 of the Finance Act, 1994. The Respondents contended that "Order" refers only to the original order passed in response to a show cause notice. The Court held that any order allowing rectification under Section 74 modifies the original order and should be read together with it. Therefore, such rectified orders fall within the meaning of "Order" under Section 121(o) of the Scheme. 3. Definition and interpretation of "Appellate Forum" under Section 121(f) of the said Scheme: The Petitioner contended that the "Appellate Forum" under Section 121(f) includes the Commissioner (Appeals) for appeals against orders refusing rectification under Section 74. The Respondents argued that it only includes appeals against original orders. The Court clarified that the definition of "Appellate Forum" includes the Commissioner (Appeals) hearing appeals under Section 85 of the Finance Act, 1994, irrespective of whether the appeal is against an original order or an order refusing rectification. Thus, the Petitioner's appeal fell within the scope of an "Appellate Forum." 4. Definition and interpretation of "amount in arrears" under Section 121(c) of the said Scheme: The Respondents argued that the Petitioner's case should fall under the "arrears category" because no appeal was filed against the original order. The Court found that the Petitioner had filed an appeal against the order rejecting rectification under Section 74, which was pending as of 30/06/2019. Therefore, the case did not fall under "amount in arrears" as defined in Section 121(c), which pertains to cases where no appeal was filed or the appeal had attained finality. 5. Compliance with principles of natural justice: The Petitioner argued that the impugned order was in gross violation of the principles of natural justice. The Court referred to previous judgments emphasizing the Scheme's objective to liquidate past disputes and provide relief to taxpayers. The Court reiterated that a liberal interpretation should be given to the Scheme to achieve its intended objectives. The Court concluded that the Respondents' view was contrary to the law and the Scheme's objectives, warranting quashing of the impugned order. Conclusion: The Court quashed the impugned order dated 06/03/2020, which placed the Petitioner's declaration under the "arrears category" and required payment of ?13,18,433.20/-. The declaration form was restored to the designated authority for consideration under the "litigation category." The Petitioner was directed to pay the tax dues as per SVLDRS-1 within two weeks, and the designated authority was instructed to issue a discharge certificate within 30 days of payment. The writ petition was allowed, and no order as to costs was made.
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