2021 (4) TMI 519 - HC - Service Tax

Violation of principles of natural justice - Service of SCN - It is the case of the petitioner that communications are required to be made either on email id or via SMS on registered mobile/phone - Recovery of service tax - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - HELD THAT - Decisions in CAPGEMINI TECHNOLOGY SERVICES INDIA LIMITED VERSUS THE UNION OF INDIA, THE CHIEF COMMISSIONER, CENTRAL GST CUSTOMS, MUMBAI ZONE, THE COMMISSIONER, CGST CENTRAL TAX, THE JOINT COMMISSIONER, CGST CENTRAL EXCISE, MUMBAI EAST, 2020 (10) TMI 3 - BOMBAY HIGH COURT put emphasis on object underlying framing of scheme. The division bench deciding the matters has emphasised that the scheme has been formulated with a view to put an end to past disputes pertaining, inter alia, Central Excise and Service Tax etc., and to have disclosure of unpaid tax and realisation of locked up revenue. The scheme has been brought in to have amicable resolution of disputes securing interest of revenue and start the new GST regime and to give benefit to eligible persons participating in the scheme of waiver of interest, fine, penalty, immunity from prosecution. It has been observed that non compliance of principles of natural justice would impeach the decision making process rendering the decision invalid in law. In case of CHAQUE JOUR HR SERVICES PVT. LTD. VERSUS UNION OF INDIA ORS. 2020 (3) TMI 659 - DELHI HIGH COURT , Delhi High Court, while application under SVLDRS had been rejected by the authority on the premise that the disputed amount was not quantified and communicated prior to 30.6.2019 finding that the impugned order has been passed without hearing petitioner had set aside the impugned order and the matter was remanded to competent authority to hear the petitioner before passing order. It is deemed appropriate that petitioner may have an opportunity of hearing. It is considered appropriate to set aside the impugned statement SVLDRS-3 dated 19th February, 2020 - petition disposed off.

Summary

Issues Involved:
1. Validity of the statement in form SVLDRS-3.
2. Compliance with principles of natural justice.
3. Proper communication of hearing notices.
4. Eligibility and benefit under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.

Issue-wise Detailed Analysis:

1. Validity of the statement in form SVLDRS-3:
The petitioner questioned the propriety and validity of the statement in form SVLDRS-3 dated 19th February, 2020, and sought to set it aside. The petitioner had applied under the Sabka Vishwas Scheme, 2019, and declared a show-cause notice amount of ?9,27,39,336/-, with a pre-deposit amount of ?2,62,21,678/-. The designated committee issued an estimate in form SVLDRS-2, stating the amount payable as ?2,93,40,631/-. The petitioner disagreed, asserting that the pre-deposit amount was ?2,62,21,678/- and submitted form SVLDRS-2A. However, form SVLDRS-3 was issued without considering the petitioner’s claims, leading to the current petition.

2. Compliance with principles of natural justice:
The petitioner argued that they were not afforded a personal hearing despite requesting one. The petitioner contended that the SVLDRS-3 declaration was patently illegal as they lost an opportunity to explain and support their claim of payments due to the lack of a hearing. The court emphasized that non-compliance with principles of natural justice would render the decision invalid. The scheme's intent was to unload the baggage of pending litigations and secure revenue interests while providing benefits to eligible persons.

3. Proper communication of hearing notices:
The petitioner claimed they did not receive any communication regarding the hearing via email or SMS, which was required. The respondents argued that notification regarding the issuance of SVLDRS-2B was system-generated and should have been accessed by the petitioner. The court noted the lack of definitive response and specific records showing that communications were issued to the petitioner via email or SMS. The absence of proper communication was a significant factor in deciding the case.

4. Eligibility and benefit under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019:
The court acknowledged that the petitioner was an eligible person to claim benefits under the Sabka Vishwas Scheme and had made a declaration accordingly. The scheme aimed to resolve past disputes and secure unpaid tax revenue while providing immunity from penalties and prosecution. The court referred to various decisions emphasizing the scheme's objective and the need for a liberal interpretation to ensure its successful implementation. The petitioner’s eligibility and the procedural lapses in communication and hearing were crucial in the court’s decision to set aside the impugned statement.

Conclusion:
The court set aside the impugned declaration in form SVLDRS-3 dated 19th February, 2020, and restored the proceedings before the authority. The concerned authority was directed to provide the petitioner with an opportunity for a hearing and decide the matter pursuant to the Sabka Vishwas Scheme. The writ petition was disposed of with the rule made absolute in the aforesaid terms.