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2021 (11) TMI 463 - HC - Service TaxSVLDRS - Clubbing of two SCN - whether the excess disputed amount deposited by the petitioner by way of pre-deposit in respect of the first show-cause notice (SCN-1) can be adjusted towards the amount payable by the petitioner in respect of the second show-cause notice (SCN-2) under the SVLDRS. - seeking issuance of discharge certificate pertaining to the petitioner without insisting on any further payments - HELD THAT - The SVLDRS was promulgated with the object of providing amnesty and dispute resolution in order to unlock legacy cases locked up in litigation at various forums by providing relief/benefit to the assessee. This underlying object of the scheme has been noticed and reiterated by this Court as well as other Courts as can be seen in the various decisions. It is also relevant to state that the SVLDRS is a beneficial scheme and has to be construed and interpreted liberally keeping in mind the aims and objectives of the schemes. In the facts of the instant case, the material on record clearly indicates that both the show-cause notices and both the appeals arising therefrom, which were pending adjudication at the time of promulgation of the SVLDRS arose between the very same petitioner and the respondents and were in respect of the same subject matter i.e., jaggery powder, the only difference being that the show-cause notices and the proceedings were relatable to two different time periods - keeping in mind the aims and objectives of the SVLDRS, which is to provide amnesty and resolution of disputes, in the facts of the instant case, the disputes between the petitioner and respondents having been undisputedly brought under the SVLDRS, both the disputes deserve to be resolved by making mutual adjustment with regard to the disputed pre-deposit made by the petitioner by consolidating and clubbing both the disputes, particularly when deduction of any amount paid by the petitioner declarant was liable to be made under Section 124 of the SVLDRS. The contention of the respondents that two separate show-cause notices cannot be clubbed together for the purpose of SVLDRS cannot be accepted especially when the respondents have given the benefits/relief under the SVLDRS in favour of the petitioner in respect of both the show-cause notices. Respondent Nos.3 and 4 are directed to adjust the excess amount deposited by the petitioner towards the amount demanded from the petitioner in Annexure-H dated 13.12.2019 and issue a discharge certificate in favour of the petitioner in respect of the second case of the petitioner for the period 16.09.2015 to 30.06.2015 and take necessary steps in this regard as expeditiously as possible - Petition allowed.
Issues Involved:
1. Quashing of Form No. SVLDRS-3 dated 13.12.2019. 2. Adjustment of excess amounts deposited by the petitioner. 3. Issuance of a discharge certificate without further payments. 4. Interpretation and application of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS). Detailed Analysis: Issue 1: Quashing of Form No. SVLDRS-3 dated 13.12.2019 The petitioner sought to quash Form No. SVLDRS-3 issued by respondent Nos. 3 and 4, which rejected the petitioner's claim for adjustment of excess amounts deposited. The court examined the SVLDRS, which aims to provide amnesty and dispute resolution for legacy cases. The court noted that the SVLDRS should be interpreted liberally to achieve its objective of resolving disputes and providing relief to taxpayers. Issue 2: Adjustment of Excess Amounts Deposited by the Petitioner The petitioner argued that the excess amount deposited in relation to the first show-cause notice (SCN-1) should be adjusted against the amount payable under the second show-cause notice (SCN-2). The court referred to Section 124 of the SVLDRS, which allows for the deduction of any amount paid as pre-deposit at any stage of appellate proceedings or during an enquiry. The court found that the SVLDRS did not specifically prohibit the adjustment of excess amounts from one case to another, especially when both cases involved the same petitioner and the same subject matter (jaggery powder), albeit for different periods. Issue 3: Issuance of a Discharge Certificate Without Further Payments The petitioner contended that since the excess amount deposited under SCN-1 exceeded the amount payable under SCN-2, the respondents should issue a discharge certificate without insisting on further payments. The court agreed with the petitioner, noting that the SVLDRS aims to provide relief and resolve disputes by allowing mutual adjustments of disputed amounts. The court directed the respondents to adjust the excess amount deposited by the petitioner towards the amount demanded in SCN-2 and issue a discharge certificate accordingly. Issue 4: Interpretation and Application of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) The court emphasized that the SVLDRS is a beneficial scheme intended to provide amnesty and resolve disputes. The court interpreted the scheme liberally, considering its objectives. The court rejected the respondents' contention that two separate show-cause notices could not be clubbed for the purpose of adjustment under the SVLDRS. The court noted that the scheme's language, particularly the use of "one or more appeals" in Section 124(1)(a), supports the interpretation that multiple show-cause notices and appeals can be considered together for the purpose of adjustment. Conclusion: The court allowed the petition, quashing the impugned order in Form SVLDRS-3 dated 13.12.2019. The court directed respondent Nos. 3 and 4 to adjust the excess amount deposited by the petitioner towards the amount demanded and issue a discharge certificate in respect of the second case for the period 16.09.2015 to 30.06.2015. The court emphasized the liberal interpretation of the SVLDRS to achieve its objective of providing amnesty and resolving disputes.
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