2020 (2) TMI 368 - HC - Service Tax

Encashment of Bank Guarantee and the Bond - the appeal is being withdrawn, on which bank guarantee and Bond was furnished - HELD THAT - The issue of discharge of Bank Guarantee and the Bond may be properly determined by the designated Committee itself. Mr. Srivastava states that the applicant will have no serious objection even if the designated Committee orders the encashment of the Bank Guarantee for the purposes of appropriating the amount guaranteed thereby towards the settlement under the said scheme. At this stage, we leave all these matters to the decision of the designated Committee itself. Based upon the decision of the designated committee, the parties will have liberty to apply to this Court for appropriate orders in relation to the Bank Guarantee and the Bond so furnished - application disposed off.

Summary

Issues Involved:
1. Withdrawal of appeal under the Sabka Vishwas Scheme
2. Release of Bank Guarantee and Bond

Analysis:

Issue 1: Withdrawal of appeal under the Sabka Vishwas Scheme
The applicant sought withdrawal of the appeal in Service Tax No.1 of 2014 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The applicant fulfilled the pre-condition of withdrawing pending matters before the High Court to avail benefits under the scheme. The Court granted leave for the withdrawal of the appeal, considering the applicant's approach to the designated Committee for benefits under the scheme.

Issue 2: Release of Bank Guarantee and Bond
Regarding the release of the Bank Guarantee and Bond, the Court decided that it cannot be granted as the purpose of these instruments was to enable the respondent to recover claimed amounts in case of appeal dismissal. However, since the appeal is being withdrawn, the Court acknowledged that ordinarily, the respondents should be allowed to encash the Bank Guarantee or enforce the Bond. The applicant's counsel mentioned that provisional approval under the scheme has been issued, and the designated Committee is proceeding with the matter. Therefore, the Court decided that the issue of the Bank Guarantee and Bond discharge should be determined by the designated Committee itself. The parties were given liberty to apply to the Court for appropriate orders based on the Committee's decision. Until such orders are made, the Bank Guarantee and Bond were to be continued by the applicant.

In conclusion, the Service Tax Appeal no.1 of 2014 was disposed of as withdrawn with directions related to the Bank Guarantee and Bond. Misc. Civil Application No.85 of 2020 was also disposed of, with all concerned parties instructed to act based on the authenticated copy of the Court's order.