2021 (9) TMI 1282 - HC - Service Tax

Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 - permission to file claim under the correct category under the SVLDR Scheme - condonation of delay in filing application - seeking not to declare the petitioner as defaulter under SVLDR Scheme and not to disallow the benefits made available to it under the SVLDR Scheme - HELD THAT - Section 123(a)(i) of the Scheme interalia permits eligibility of an assessee whose appeal arising out of an order-in-original is pending as of June 30 2019 for consideration of the total amount of duty which is being disputed in the appeal. Admittedly the petitioner s appeal challenging the order in original dated March 16 2018 was pending on the cut-off date i.e. on June 30 2019 as the same was dismissed by the Commissioner(Appeals) at a later date that is on July 9 2019. This apart the petitioner s application under the scheme was also considered to be appropriate as Form SVLDR-3 was generated calling upon the petitioner to deposit 40, 20, 877/- the payment whereof was to be made on or before June 30 2020 which the petitioner did not make - petitioner had inadvertently filed its declaration under SVLDR Rule 3(2)(b) i.e. amount in arrears instead of SVLDR Rule 3(2)(a) which is under the category where the show cause notice of one or more appeals is pending as on June 30 2019. It appears that such mistake was a bonafide mistake of having filed the SVLDR form under a wrong category. Thus it would be in the interest of justice that an opportunity be granted to the petitioner to avail the benefit of the scheme if any other conditions under the scheme are being fulfilled by the petitioner. Condonation of delay in filing application - HELD THAT - The condonation of delay application was rejected by the Commissioner (Appeals) on the assumption that he had no power to condone delay after 90 days though in fact the appeal was filed within 90 days. Considering the fact that the order-in-original dated March 16 2018 was received by the petitioner on March 24 2018 and the appeal was filed on June 21 2018 which is on the 88th day in our opinion the Commissioner (Appeals) was not correct in rejecting the appeal as time barred. On this count the order dated March 16 2018 passed by the Commissioner (Appeals) would be required to be set aside and the petitioner s appeal to be restored to the file of the appellate authority. Petition allowed in part.

Summary

Issues Involved:
1. Entitlement to avail the benefit of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme).
2. Dismissal of petitioner's appeal by Commissioner (Appeals) as time-barred.

Analysis:

Issue 1: Entitlement to SVLDR Scheme
The petitioner, a company engaged in the oil and gas industry, sought relief under the SVLDR Scheme due to financial difficulties and defaults in service tax payment. An investigation initiated against the petitioner led to a demand notice for service tax payment, resulting in penalties and charges. The petitioner filed an appeal against the order, which was dismissed by the Commissioner (Appeals) on grounds of being time-barred. The petitioner contended that the appeal was filed within the prescribed period but was erroneously dismissed. Subsequently, the SVLDR Scheme was introduced by the Government of India to resolve tax disputes, and the petitioner applied for relief under the scheme. However, an error in filing the declaration under the wrong category led to a demand for tax payment, which the petitioner failed to pay by the deadline. The petitioner sought rectification of the error but missed the deadline for filing the declaration. The petitioner faced financial constraints exacerbated by the COVID-19 pandemic, leading to challenges in meeting the tax dues. Additionally, the petitioner's tenant received a notice to deposit lease rentals against the petitioner's outstanding tax dues. Consequently, the petitioner approached the court seeking relief under the SVLDR Scheme.

Issue 2: Dismissal of Appeal as Time-Barred
The court considered the petitioner's entitlement to the SVLDR Scheme and the dismissal of the appeal by the Commissioner (Appeals) on the grounds of being time-barred. The court noted discrepancies in the time limit for filing the appeal communicated to the petitioner in Hindi and English. The court found that the appeal was filed within the stipulated period and that the Commissioner (Appeals) erred in rejecting it as time-barred. The court directed the authorities to reconsider the petitioner's application under the SVLDR Scheme and restore the appeal to the Commissioner (Appeals) for a fresh decision. The court emphasized granting the petitioner an opportunity to avail the benefits of the scheme and receive a fair hearing for the appeal.

In conclusion, the court partially allowed the petition, directing the authorities to review the petitioner's SVLDR Scheme application and restore the appeal for further consideration. The court highlighted the need for procedural fairness and rectification of errors in the legal process, ensuring that the petitioner receives a fair opportunity to resolve tax disputes and address financial challenges effectively.