2021 (10) TMI 590 - HC - Service Tax

Principles of natural justice - seeking directions to the Respondent No. '4' to give an opportunity of hearing to the Petitioner to present its case in relation to the Second Declaration - HELD THAT - The Respondent vide its letter dated 08th August, 2019 had pointed out that, even according to the Petitioner s own calculation, service tax liability was due and outstanding. The Petitioner was asked to deposit the balance service tax liability as calculated by the Petitioner vide the said letter. In fact, from the summons dated 20th May, 2019, it is apparent that the case was under investigation under Sections 70 and 174 of the CGST Act and the Petitioner has been asked to furnish a large number of documents including copies of challans showing its service tax liability deposited after the date of service - the said communication dated 08th August, 2019 does not indicate that the quantum of duty had either been quantified or communicated by the Respondent to the Petitioner on or before 30th June, 2019. Petition dismissed.

Summary

Issues:
Challenge to rejection orders of Second Declaration filed under Sabka Vishwas Scheme.

Analysis:
The petitioner challenged the rejection orders of the Second Declaration filed under the Sabka Vishwas Scheme. The petitioner sought directions to the respondent to provide an opportunity for a hearing and pass a reasoned order in accordance with the principles of natural justice. The petitioner also requested copies of complete correspondence and note-sheets related to investigations and declarations filed under the scheme.

The petitioner's counsel argued that the respondent had initiated an inquiry into the petitioner's service tax liability for work contract services provided under a specific contract. The petitioner claimed to have submitted relevant documents and details of pre-deposited tax liability in response to summons and letters from the respondent. The petitioner contended that it had deposited a significant amount towards the admitted service tax liability based on the respondent's instructions.

The petitioner attempted to settle the tax dispute by filing a declaration under the Sabka Vishwas Scheme, which was rejected by the respondent citing non-quantification of dues up to a specified date. Subsequent attempts by the petitioner to file fresh declarations and seek reconsideration were also met with rejection. The petitioner's requests for reconsideration and information under the Right to Information Act went unanswered for months.

A review of the documents revealed that the petitioner had unilaterally stated its service tax liability in a letter and made a partial payment towards it. The respondent, in a subsequent letter, highlighted the outstanding service tax liability and requested the petitioner to deposit the balance amount. The investigation under the CGST Act required the petitioner to provide various documents, but it was observed that the quantum of duty had not been quantified or communicated by the respondent to the petitioner by a specific date.

The court found the petition lacking in merit and dismissed it. The judgment emphasized that the communication from the respondent did not indicate the quantification of duty by a certain date. The court directed the order to be uploaded on the website and forwarded to the counsel via email.