2021 (6) TMI 638 - HC - Service Tax

Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 - service tax return for the period from April 2014 to September 2014 filed late - non-payment of interest or penalty as applicable - HELD THAT - As per Section 127 of the SVLDRS Scheme, when the declaration made by the petitioner was rejected, meaning thereby he would be liable to pay further interest and penalty on late payment and return. However, to levy any such liability under Section 127 of the SVLDRS Scheme, under Section 127(3), it mandates that after the issue of estimate under Section 127(2), the designated committee shall give opportunity of being heard to the declarant, if he so desires, before issuing the statement indicating the amount payable by the declarant. Considering the benevolent scheme which has been set into motion by the respondents, the petitioner was required to be heard even otherwise under the statutory mandate - the Form SVLDRS-1 was rejected by the designated committee which is embodied in the remarks column is set-aside. The cases are remanded back to the designated committee with a direction to give an opportunity of hearing to the petitioner by adhering to the rules of natural justice. Petition allowed by way of remand.

Summary

Issues:
Challenge to levy of tax under SVLDRS-1 form, rejection of petitioner's claim under SVLDRS Scheme 2019, duty to pay penalty and interest, eligibility under SVLDRS Scheme, opportunity of hearing before imposing additional liability.

Analysis:
The writ petition challenges the levy of tax claimed under Form SVLDRS-1, specifically related to service tax return filed late by the petitioner. The petitioner sought waiver from interest and penalty under the Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019. The rejection of the petitioner's claim without considering the provisions of the Scheme and without providing a hearing opportunity is contested.

The petitioner filed the SVLDRS Scheme form on time, and the subsequent order demanded penalty and interest without granting a hearing. The Scheme aimed to resolve existing disputes and provided for declarations by eligible persons, excluding certain categories as outlined in Section 125, emphasizing the benevolent nature of the legislation.

Under the SVLDRS Scheme, verification and estimation of payable amounts are crucial, as per Sections 126 and 127. The rejection of the petitioner's claim led to potential additional liabilities, necessitating a hearing opportunity as mandated by Section 127(3) before imposing such levies.

The judgment sets aside the rejection of Form SVLDRS-1, emphasizing the importance of providing a hearing opportunity to the petitioner in line with natural justice principles. The case is remanded to the designated committee for a proper hearing and subsequent orders in accordance with the law, ensuring adherence to statutory requirements and fair treatment.

In conclusion, the writ petition is allowed to the extent of directing a hearing for the petitioner by the designated committee to ensure procedural fairness and compliance with the SVLDRS Scheme's provisions.