2021 (6) TMI 1116 - HC - Service Tax

Levy of tax which was claimed under Form SVLDRS-1 - seeking waiver from interest and penalty as was promised under the Scheme - Form SVLDRS-1 submitted by the petitioner was summarily rejected, without giving any opportunity of hearing to the petitioner - HELD THAT - According to the Scheme, once the assessee avails the Scheme and files the return by declaration, the verification of declaration by the designated committee was prescribed under Section 126 of the SVLDRS Scheme and the issue of statement by the designated committee is covered under Section 127 of the SVLDRS Scheme. The order which is on record whereby the declaration of the petitioner was rejected, meaning thereby he would be liable to pay the additional amount, which would be a levy imposed. In order to impose such levy, the designated committee was duty bound to hear the petitioner by giving him an opportunity of hearing. Considering the benevolent scheme which has been set into motion by the respondents, the petitioner was required to be heard even otherwise under the statutory mandate. The order whereby the Form SVLDRS-1 was rejected by the designated committee which is embodied in the remarks column is setaside. The cases are remanded back to the designated committee with a direction to give an opportunity of hearing to the petitioner by adhering to the rules of natural justice - Petition allowed by way of remand.

Summary

Issues:
Challenge to levy of tax under SVLDRS Scheme 2019, rejection of Form SVLDRS-1 without opportunity of hearing, interpretation of SVLDRS Scheme provisions.

Analysis:
The writ petition challenged the levy of tax claimed under Form SVLDRS-1, related to the Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019. The petitioner filed service tax return late for the period from October 2016 to March 2017, without paying interest or penalty, seeking waiver under the SVLDRS Scheme. The respondent rejected the Form SVLDRS-1 without considering the Scheme provisions or granting a hearing, leading to the petitioner's objection.

The petitioner contended that the order requiring payment of penalty and interest was issued without a hearing, even though the Form was filed under the SVLDRS Scheme on time. The Scheme aimed to resolve disputes and provide relief, outlining eligible persons and procedures for declarations, verifications, and statements under Sections 125, 126, and 127 of the SVLDRS Scheme.

Section 127 of the SVLDRS Scheme mandates giving the declarant an opportunity to be heard before issuing a statement on payable amounts. The rejection of the petitioner's declaration without a hearing violated this requirement, leading to potential additional liabilities for the petitioner. The Court emphasized the importance of adhering to natural justice principles and statutory mandates in such cases.

Consequently, the Court set aside the rejection of Form SVLDRS-1, remanding the case to the designated committee for a proper hearing following the rules of natural justice. The designated committee was directed to reconsider the case after providing the petitioner with a fair opportunity to present their case, ensuring compliance with legal procedures and principles.

In conclusion, the writ petition was allowed to the extent of granting the petitioner a hearing and directing the designated committee to reevaluate the case in accordance with the law and principles of natural justice.