2020 (11) TMI 552 - HC - Service Tax

Tax Relief under the SVLDR Scheme - application for Tax Relief rejected on the ground that there is error in filling up Form No.SVLDRS-1 - HELD THAT - In the present case there is no dispute about the petitioner being issued with Audit Note dated 04.04.2019 which mentions not only the duty demand but also the service tax recovered from the petitioner, and thus, there has been quantification of the duty demand in a sum of ₹ 23,86,861/- and acceptance of service tax recovered in ₹ 8,09,269/- during audit before the 30th day of June, 2019. There is also no dispute that the petitioner satisfies the other conditions of the SVLDR Scheme and is entitled to avail the tax relief. If these facts cannot be disputed and the conditions as contemplated under the SVLDR Scheme are satisfied, an accrued substantive right by way of Tax relief cannot be denied on the technical ground that there is an error in filling in the details in Form-SVLDRS as Nil , especially when there is an onus on the Department to verify the records. The technical glitch asserted by the petitioner while filling in the details in Form SVLDRS-1 is not seriously contested. In the peculiar facts and circumstances of the case, including the fact that the petitioner is not extended an opportunity as contemplated under the provisions of section 127(3) of the SVLDR Scheme with the issuance of Form SVLDRS-2 and an error apparent in Form SVLDRS-3 cannot be controverted, and also in view of the fact that the SVLDR scheme is envisaged as a time bound exercise, this Court is of the considered opinion that the petitioner is entitled for issuance of Discharge Certificate as contemplated under Section 127(8) of the SVLDR Scheme. The writ petition is allowed in part directing the Designated Committee to expeditiously consider issuance of Discharge Certificate to the petitioner as contemplated under Section 127(8) of the SVLDR Scheme.

Summary

Issues:
1. Issuance of revised Form No.SVLDRS-3 and Discharge Certificate under SVLDR Scheme.
2. Error in Form No.SVLDRS-3 issuance by Designated Committee.
3. Entitlement to Tax Relief under SVLDR Scheme.
4. Opportunity for declarant to indicate agreement/disagreement with Form No.SVLDRS-3.
5. Time-bound jurisdiction of Designated Committee to modify Form No.SVLDRS-3.
6. Verification of disclosure by declarant under SVLDR Scheme Rules.

Analysis:

1. Issuance of revised Form No.SVLDRS-3 and Discharge Certificate under SVLDR Scheme:
The petitioner sought a direction for the issuance of a revised Form No.SVLDRS-3 and Discharge Certificate under the Sabka Vishwas [Legacy Dispute Resolution] Scheme, 2019. The petitioner's application under the scheme was accompanied by an Audit Note highlighting a total liability. The petitioner argued that the Designated Committee erred in issuing Form No.SVLDRS-3 without considering the pre-deposit made by the petitioner, leading to discrepancies in the amount payable.

2. Error in Form No.SVLDRS-3 issuance by Designated Committee:
The petitioner contended that the Designated Committee's issuance of Form No.SVLDRS-3 contained a remark that was irrelevant to the petitioner's business activities, indicating an apparent error. Despite the petitioner's application for rectification, no action was taken by the Department. The petitioner emphasized the need for a revised form considering the actual liabilities and deposits made.

3. Entitlement to Tax Relief under SVLDR Scheme:
The petitioner, engaged in Business Exhibition Services, argued for tax relief under the SVLDR Scheme based on the deposit made and liabilities quantified in the Audit Note. The petitioner highlighted the provisions of the scheme regarding tax relief and the conditions for availing it, emphasizing the need for accurate calculation of the amount payable.

4. Opportunity for declarant to indicate agreement/disagreement with Form No.SVLDRS-3:
The petitioner raised concerns about not being provided with an opportunity to indicate agreement or disagreement with Form No.SVLDRS-3, as stipulated under the SVLDR Scheme rules. This lack of opportunity hindered the petitioner's ability to contest the computed tax relief, leading to the petition before the Court.

5. Time-bound jurisdiction of Designated Committee to modify Form No.SVLDRS-3:
The respondents argued that the Designated Committee's jurisdiction to modify Form No.SVLDRS-3 is time-bound, and any modifications must be made within 30 days of the statement's issuance indicating the amount payable. This time constraint was highlighted as a limitation on the Committee's authority to rectify errors post-issuance.

6. Verification of disclosure by declarant under SVLDR Scheme Rules:
The respondents emphasized the importance of accurate disclosures by declarants under the SVLDR Scheme, as per Rule 6 of the SVLDR Scheme Rules, 2019. The Designated Committee's obligation to verify declarants' disclosures based on furnished particulars and departmental records was underscored, indicating the need for precise information submission.

In conclusion, the Court acknowledged the petitioner's entitlement to tax relief under the SVLDR Scheme and directed the Designated Committee to consider issuing a Discharge Certificate promptly. The judgment highlighted the importance of accurate calculations, verification processes, and procedural compliance under the scheme, ensuring fair resolution of tax disputes.