2020 (11) TMI 286 - HC - Service Tax

Withdrawal of form SVLDRS-3 (exhibit-K) - direction to the respondents to refund the amount collected from the petitioner - whether petitioner's application (declaration) under the scheme should be construed as one under the 'pending litigation category' or under the 'arrears category'? - HELD THAT - The appeal filed by the petitioner before the CESTAT against the order-in-original dated 18.09.2018 was pending as on 30.06.2019 and therefore, the application (declaration) of the petitioner should be treated as one under the pending litigation category and not one under the arrears category . This is because in addition to the above discussion, to be eligible under the arrears category in terms of section 121(c), no appeal should be filed by the declarant against the order-in-original before expiry of the limitation period for filing appeal or the order-in-appeal has attained finality or the declarant has admitted the tax liability but has not paid the same which is not the position in the present case as petitioner had filed appeal against the order-in-original before expiry of the limitation period. It was held in the case of Capgemini Technology Services India Limited 2019 (3) TMI 349 - BOMBAY HIGH COURT and Thought Blurb 2020 (10) TMI 1135 - BOMBAY HIGH COURT , declaration of the petitioner filed under the scheme on 23.12.2019 has to be construed to be one under the pending litigation category . The matter is remanded back to the Designated Committee to take a fresh decision as to the consequential relief to be granted to the petitioner, including refund of the amount paid by the petitioner, treating the declaration of the petitioner as one under the pending litigation category after affording reasonable opportunity of hearing to the petitioner - Petition allowed by way of remand.

Summary

Issues Involved:
1. Classification of the petitioner’s application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 – whether it falls under the 'pending litigation category' or the 'arrears category'.
2. Entitlement to refund of the amount paid by the petitioner under the scheme.

Issue-wise Detailed Analysis:

1. Classification of the Petitioner’s Application:
The petitioner filed an application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, seeking classification under the 'pending litigation category'. The petitioner’s appeal against the order-in-original was filed before the CESTAT on 17.12.2018. Despite being marked as defective and not receiving a regular number, the appeal was pending as on 30.06.2019. The respondents, however, classified the petitioner under the 'arrears category' on the grounds that the appeal was not admitted and was dismissed on 09.12.2019. The court held that the statute requires only that an appeal be filed and pending as on 30.06.2019, without specifying that it must be admitted. Therefore, the petitioner’s application should be treated under the 'pending litigation category'.

2. Entitlement to Refund:
The petitioner argued that if classified under the 'pending litigation category', no further payment would be required, and it would be entitled to a refund of the amount paid. The court noted that the petitioner had paid a total of ?2,98,68,657.00, including amounts appropriated by the service tax authorities. The court directed the Designated Committee to reconsider the petitioner’s application under the 'pending litigation category' and determine the consequential relief, including the refund, after affording a reasonable opportunity of hearing to the petitioner.

Conclusion:
The court concluded that the petitioner’s application should be classified under the 'pending litigation category' as the appeal was pending as on 30.06.2019, despite being marked as defective. The matter was remanded to the Designated Committee to take a fresh decision on the relief to be granted to the petitioner, including the refund of the amount paid. The writ petition was allowed with no order as to costs.