2022 (7) TMI 523 - HC - Service Tax

Benefits of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Seeking declaration filed by the petitioner as per law and following the principles of natural justice - power of Designated Committee Constituted under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 to adjudicate upon the admissibility of declaration beyond Section 122 and Section 125 of the Finance Act - seeking declaration of interest for delayed payment of Service Tax merits waiver, under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, even if entire Service Tax was paid prior to 30th June, 2019. HELD THAT - Mr Gupta is right, to the extent that there is nothing stated in the e-mail dated 05.03.2020, as to whether or not the impact of the circulars dated 25.09.2019 and 29.10.2019 was taken into account, before respondent no.3/Designated Committee concluded that the declaration made by the petitioner deserved to be rejected - the matter needs a fresh examination by respondent no.3/Designated Committee. Respondent no.3/Designated Committee is, thus, directed to reexamine the matter. Respondent no.3/Designated Committee will afford an opportunity of hearing to the petitioner before reaching a conclusion in the matter, one way or the other - petition disposed off.

Summary

Issues:
Petitioner's eligibility for Sabka Vishwas Scheme benefits, rejection of declaration without hearing, authority of Designated Committee, waiver of interest under the Scheme, and costs of the petition.

Analysis:
The petitioner sought relief under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, after their declaration was rejected without a hearing. The petitioner had delayed service tax payments from 2013-2014 to 2017-2018 and deposited the amount upon notice, incurring interest. The interest liability of Rs 42,06,417 led to the filing of a declaration under the Scheme, which was rejected by the Designated Committee. The petitioner argued that since the tax liability was paid before June 30, 2019, interest should be waived, citing relevant circulars.

The court noted that the rejection lacked consideration of circulars impacting the case and ordered a fresh examination by the Designated Committee. The Committee was directed to reexamine the matter, provide a hearing to the petitioner, and treat the writ petition as a representation for expediency. The Committee must notify the petitioner of the hearing details, allowing for videoconferencing if needed. The judgment disposed of the writ petition accordingly, with the pending application closed.

This judgment highlights the importance of procedural fairness and the principles of natural justice in administrative decisions under the Sabka Vishwas Scheme. It emphasizes the need for authorities to consider all relevant factors, including circulars and legal provisions, before making determinations that impact the rights of taxpayers. The court's decision to remit the matter for a fresh examination underscores the significance of providing parties with a fair opportunity to present their case and address any shortcomings in the initial decision-making process.