2022 (5) TMI 144 - HC - Service Tax

Validity and legality of FORM SVLDRS 3 - cleaning services - period between 16.06.2005 and 31.03.2008 - demand of service tax alongwith interest and penalty - grievance is that despite the fact that 50% amount towards the predeposit had already been made, the Committee constituted for the purpose of looking into the claim under the Scheme while issuing the SVLDRS 3 granted deduction of Rs. 20,11,712 /- only and the balance amount of Rs. 21,60,023 /- was shown as payable which appears to be on the count that the writ applicant has not made payment of such amount. HELD THAT - When the Tribunal itself has recorded in its order dated 14.03.2011, that out of the total confirmed duty of Rs.83,43,470/-, the appellant i.e. the writ applicant herein has already deposited an amount of Rs.49,33,521/- along with interest of Rs.3,93,178/-, then what further objection the Committee could have had for the purpose of processing the application filed by the writ applicant. The Committee should once again look into the aforesaid aspect, more particularly, the order passed by the Tribunal itself and thereafter, proceed further in accordance with law. Let the aforesaid exercise be undertaken within 8 weeks from the date of receipt of writ of this order.

Summary

Issues:
1. Challenge to SVLDRS Form 3 dated 04.02.2020 issued by Respondent No.3.
2. Validity and legality of provisions regarding SVLDRS Form 3.
3. Stay on the operation of SVLDRS Form 3.
4. Direction to not initiate coercive action during the petition's pendency.
5. Availing benefits under Sabka Vishwas (Legacy Dispute) Scheme, 2019.
6. Discrepancy in the amount payable under SVLDRS Form 3.

Analysis:

1. The writ applicant sought various reliefs through a writ application under Article 226 of the Constitution of India. The applicant, a service provider registered under the Finance Act, challenged the SVLDRS Form 3 dated 04.02.2020 issued by Respondent No.3. The applicant requested the court to quash the form, issue a fresh form considering the deposit made, stay the form's operation, and prevent coercive action during the petition's pendency.

2. A search operation in 2007 led to a show cause notice in 2009, demanding payment of service tax with interest and penalty. An Order in Original in 2010 confirmed a demand of Rs.83,43,470. The matter is pending before the Tribunal. The Sabka Vishwas Scheme, 2019 was introduced by the Central Government, which the applicant decided to utilize.

3. The applicant declared a liability of Rs.83,43,470 and made a pre-deposit of 50% of this amount. The Tribunal acknowledged this deposit. However, the Committee processing the claim under the Scheme deducted only a portion of the deposit, showing the balance as payable due to non-payment.

4. The Court heard arguments from both parties. The respondents claimed the Committee acted within the scheme's framework, considering a different demand amount. The Court found this stance confusing, especially as the Tribunal had acknowledged the deposit made by the applicant.

5. The Court directed the Committee to reevaluate the matter, considering the Tribunal's order, and proceed lawfully. The Court emphasized the need to avoid unnecessary litigation for the applicant. The writ application was disposed of, granting eight weeks for the reevaluation process.

6. The judgment aimed to ensure a fair assessment of the applicant's liability under the Scheme, emphasizing the importance of proper consideration of previous deposits and avoiding unnecessary legal disputes for the applicant.