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2020 (12) TMI 283 - HC - Service TaxSabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Grant of remission - grant of deduction of pre-deposit - validity of Paragraph 2(iv) of the impugned circular dated 25.09.2019 - vires of provisions of sub-section (2) of Section 124 of The Finance (No.2) Act, 2019 or not - breach of provisions of Section 124 (2) of the Finance (No.2) Act, 2019 or not - HELD THAT - Perusal of the provisions of the Scheme, shows that the Scheme is a complete Code in itself. In substance, it is a scheme for recovery of duty/indirect tax to unlock the frozen assets and to recover the tax arrears at a discounted amount. Thus, Sabka Vishwas Scheme , although a beneficial scheme for a declarant, is statutory in nature, which has been enacted with the object and purpose to minimise the litigation and to realise the arrears of tax by way of settlement at discounted amount in an expeditious manner. In other words the scheme is a step towards the settlement of outstanding disputed tax liability. Facts of the present case are that an order in original dated 29.03.2019 was passed by the Respondent No.3 against the petitioner confirming a demand of service tax of ₹ 4,53,63,720/-, ₹ 2,84,02,508/- and ₹ 85,84,024. The amount already deposited by the petitioner i.e. ₹ 3,64,81,370/- ₹ 2,18,84,061/-, were appropriated by the order in original itself. Thus as per aforesaid order in original dated 29.03.2019 the amount of tax in arrear was ₹ 1,74,66,374/-. This amount was recoverable as arrears of duty under the indirect tax enactment. Thus, the aforesaid amount of ₹ 1,74,66,374/- is the amount in arrears under Section 121(c) of the Act - The words amount payable has been defined in Section 121 (e) of the Act. It means the amount calculated by the authority as the amount of tax dues less the tax relief. Thus, the amount of tax dues being the amount in arrears in terms of provisions of Section 124(1)(c) read with Section 121(c) of the Finance (No.2) Act, 2019 is the amount of duty which is in arrears as per order in original dated 29.03.2019 i.e. ₹ 1,74,66,374/-. Accordingly, it has been reflected in the SVLDRS-3, by the designated authority who computed the amount of tax relief under Section 124(1)(c) at ₹ 69,86,549.60. Thus, the balance amount as estimated amount payable has been determined at ₹ 1,04,79,824.40. The Tax relief under Section 124(1)(c) has been given to the petitioner for ₹ 69,86,549.60. The balance amount of ₹ 1,04,79,824.40 determined by the designated authority and payable by the petitioner under Section 127, is in accordance with the provisions of Section 124(1)(c) read with Section 121(c)/(d) and (e) of the Act which does not suffer from any error of law - From the facts and the legal provisions as aforenoted neither the circular is in breach of the provisions of Section 124(1)(c) or sub-section (2) of Section 124 nor the amount estimated as per SVLDRS-3 dated 01.02.2020 suffers from any error of law. Petition dismissed - decided against petitioner.
Issues:
1. Challenge to circular dated 25.09.2019 and SVLDRS-3 dated 1.2.2020. 2. Interpretation of provisions of Finance (No.2) Act, 2019. 3. Calculation of relief under Sabka Vishwas Scheme. 4. Compliance with statutory requirements in determining tax relief. 5. Consideration of relief under Section 124(1)(c) of the Act. 6. Determination of amount payable by the declarant. 7. Compliance with procedural requirements under the Scheme. 8. Request for the acceptance of payment due to COVID-19 Pandemic. Analysis: 1. The writ petition challenged the circular dated 25.09.2019 and SVLDRS-3 dated 1.2.2020. The petitioner sought the quashing of the circular, direction to accept SVLDRS-1 Declaration, and relief of remission on a specific amount. The petitioner argued that provisions of the circular and SVLDRS-3 were in breach of the Finance (No.2) Act, 2019. 2. The court analyzed the provisions of Chapter V of the Finance (No.2) Act, 2019, which introduced the Sabka Vishwas Scheme. The scheme aimed to settle tax arrears at a discounted amount to minimize litigation. The court highlighted various sections empowering designated committees, calculating relief percentages, and providing immunities to declarants. 3. The court delved into the definition of "amount in arrears," "amount of duty," and "amount payable" under Sections 121 and 124 of the Act. It examined the petitioner's tax arrears as per the original order and the computation of relief under Section 124(1)(c) for the declarant. The court emphasized the importance of correctly determining the amount payable by the declarant. 4. It was established that the relief under the Sabka Vishwas Scheme was calculated based on the tax dues relatable to the amount in arrears. The court noted that the designated authority had appropriately determined the relief and the balance amount payable by the petitioner in accordance with the statutory provisions. 5. The court concluded that neither the circular nor the SVLDRS-3 suffered from any legal errors in calculating the relief under Section 124(1)(c). The judgment dismissed the writ petition, finding no merit in the petitioner's claims regarding the breach of statutory provisions. 6. Lastly, the court addressed the petitioner's request for the acceptance of payment delayed due to the COVID-19 Pandemic. While not issuing a specific direction, the court allowed the petitioner to approach the relevant authority for consideration, emphasizing that no formal directive was provided in this regard.
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