2020 (6) TMI 38 - HC - Service Tax

Benefit under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 rejected - mistake in the entry of penalty in Form SVLDRS-1 by petitioner - whether the claim of the petitioner for the benefit under Scheme 2019 would stand rejected as because of the aforesaid mistake of not mentioning the penalty or a different view can also be taken in the matter? HELD THAT - Apparently, a mistake made can be of two different types, one being a mistake based upon which a legal right is claimed so that the mistake made can be construed to be an act of misleading the authorities to claim a benefit which otherwise a party is not entitled or the mistake made was more of inadvertent nature, which can also be terms as a callous mistake, which does not put the party making such mistake on an undue advantageous position so as to make them entitled to a benefit which they are otherwise not. In the instant case, the mistake made by the petitioner was that the penalty imposed was stated to be zero whereas it is already on record that the respondent authorities had imposed a penalty of ₹ 11,48,82,644.00. The mistake made by the petitioner by not stating about the penalty imposed upon them in Form SVLDRS-1 cannot be said to be a mistake by which the petitioner claimed an undue benefit which they otherwise are not entitled under the law. When we look into the Scheme 2019, there are no provision which provides that a person upon whom a penalty is imposed would not be entitled to the benefit given under the scheme. This petition stands disposed of by requiring the petitioner to submit an application before the respondent authorities for correction to be made in the information provided in the Form SVLDRS-1 as regards the penalty imposed and upon such application being made, the respondent authorities would pass a reasoned speaking order thereon - Petition disposed off.

Summary

Issues:
1. Assessment of liability to pay service tax under the Finance Act, 1994 for the period 2009-2014.
2. Imposition of penalty under the 1st Proviso to Section 78 of the Finance Act, 1994.
3. Eligibility of the petitioner for relief under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
4. Rejection of the petitioner's claim under the Scheme 2019 due to incorrect declaration of penalty in Form SVLDRS-1.

Analysis:
1. The petitioner, Assam Cricket Association, was found liable to pay service tax for the period 2009-2014. A penalty of ?11,48,82,644.00 was imposed on them by the Commissioner GST and Central Excise, Guwahati. The petitioner appealed this decision before the Custom, Excise and Service Tax Appellate Tribunal, East Regional Bench, Kolkata, and paid 75% of the levied amount as mandatory deposit.

2. The Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 was introduced under Chapter-V of the Finance Act, 1994. The petitioner claimed to be eligible for relief under Section 124(1)(a)(ii) of the Finance Act, 1994, which allows relief up to 50% of tax dues if the amount due exceeds ?50 lakhs. The petitioner did not fall under the exceptions mentioned in Section 125(1)(a) to (h), making them eligible to make a declaration under the Scheme 2019.

3. To claim the benefit under the Scheme 2019, claimants were required to submit Form SVLDRS-1, which included a column for mentioning any previously imposed penalty. The petitioner mistakenly stated the penalty as zero in the form, despite a penalty of ?11,48,82,644.00 being imposed on them. Due to this error, the authorities rejected the petitioner's claim under the Scheme 2019.

4. The main issue before the Court was whether the petitioner's claim under the Scheme 2019 could be rejected solely based on the incorrect declaration of penalty in Form SVLDRS-1. The Court analyzed the nature of the mistake and concluded that the petitioner's error was inadvertent and did not amount to claiming an undue benefit. The Court found no provision in the Scheme 2019 that disallowed benefits to those with imposed penalties. The parties agreed that the petitioner could submit an application to correct the mistake in the form, and the authorities would consider the claim accordingly.

5. The Court disposed of the petition by requiring the petitioner to submit an application for correction within 15 days. The authorities were directed to pass an order on the application within 2 months. The Court also clarified that the petitioner could claim any other entitled benefits under the Scheme 2019 apart from Section 124(1)(a)(ii).