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2021 (2) TMI 379 - HC - Service TaxSVLDRS - Eligibility of the declarant for making a declaration under the category of investigation, enquiry or audit or maintainability of such declaration on the ground that the amount of tax dues was not quantified on or before 30.06.2019 - Rejection of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - HELD THAT - In THOUGHT BLURB VERSUS UNION OF INDIA AND ORS. 2020 (10) TMI 1135 - BOMBAY HIGH COURT , this Court faced with a similar issue and it was held that there is a letter of respondent No.3 to the petitioner quantifying the service tax liability for the period 1st April, 2016 to 31st March, 2017 at ₹ 47,44,937.00 which quantification is before the cut off date of 30 th June, 2019 and on the other hand for the second period i.e. from 1st April, 2017 to 30th June, 2017 there is a letter dated 18th June, 2019 of the petitioner addressed to respondent No.3 admitting service tax liability for an amount of ₹ 10,74,011.00 which again is before the cut off date of 30th June, 2019. Thus, petitioner s tax dues were quantified on or before 30th June, 2019 and there are no hesitation to hold that petitioner was eligible to file the application (declaration) as per the scheme under the category of enquiry or investigation or audit whose tax dues stood quantified on or before 30th June, 2019. In the present case, the petitioner in its letter dated 10.05.2019 had clearly admitted service tax dues of ₹ 64,72,543.00 for the period under consideration. This acknowledgment or admission by the petitioner was before the cut-off date of 30.06.2019. In fact, in the final audit report dated 07.11.2019, reference has been made to this letter dated 10.05.2019 wherein petitioner had admitted service tax liability of ₹ 64,72,543.00. Though the final audit report may be post 30.06.2019, the admission of the petitioner was certainly prior to 30.06.2019 - rejection of the declaration of the petitioner dated 02.12.2019 by the designated committee on 12.02.2020 is not justified. Petition allowed.
Issues:
1. Eligibility of the petitioner to file a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. 2. Rejection of the petitioner's declaration by the designated committee. 3. Interpretation of the term "quantified" in the context of the scheme. 4. Compliance with the deadline for quantification of tax dues under the scheme. Analysis: Issue 1: The petitioner sought relief under the Sabka Vishwas Scheme due to alleged non-filing and short payment of service tax. The petitioner, a service provider, admitted default in payment and assured to discharge the balance service tax dues. The audit report mentioned the petitioner's assurance to pay the outstanding liability. The petitioner submitted a declaration under the scheme, claiming nil tax dues after pre-deposit. However, the committee rejected the declaration, citing ineligibility as tax dues were not quantified before 30.06.2019. Issue 2: The respondents contended that the petitioner was ineligible under the scheme as tax dues were not quantified before the specified date. They argued that without written communication quantifying the amount payable before 30.06.2019, the declaration was not maintainable. The final audit report post-dated the deadline, indicating no quantification before the cutoff date, leading to the rejection of the petitioner's declaration. Issue 3: The court referred to previous judgments to interpret the term "quantified" under the scheme. It highlighted that written communication of duty demand or admission of duty liability during audit, investigation, or enquiry constituted quantification. The court emphasized that such communication included letters intimating duty demand or liability admitted by the person concerned during the process. Issue 4: The court, based on precedents, held that the petitioner's admission of service tax dues before 30.06.2019 made them eligible to file the declaration under the scheme. The rejection of the declaration was deemed unjustified, and the matter was remanded for reconsideration. The court directed the committee to provide a hearing to the petitioner and pass a speaking order within a specified timeframe, ensuring due communication to the petitioner. Overall, the court allowed the writ petition, setting aside the rejection order and instructing a fresh consideration of the petitioner's declaration under the scheme's relevant category, emphasizing adherence to the scheme's provisions and principles of natural justice.
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