2022 (8) TMI 106 - HC - Service Tax

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) - Petitioner has not been given credit which it had already paid even before the show cause notice was issued - Extended period of limitation - demand of Interest and penalty - HELD THAT - For a person to know what is the reason why the designated committee does not agree with the declarant, the person has to approach the Court of law by filing a Writ Petition and wait for a reply to be filed by an officer who was never a part of the designated committee. It shocks the conscience of this Court to permit continuance of such a practice. It is a most unreasonable and unfair practice. Every declarant is entitled to know the reason why his submissions have been rejected. Therefore, it is directed that the Central Government that, in every case where Form No. SVLDRS-3 is received, a copy of the designated committee s report/opinion, i.e., detailed reason for arriving at the conclusion that it has arrived at shall be simultaneously provided on the website and if that is technically not feasible, within 48 hours a copy of the same shall either be sent by email or by courier to the declarant. There is a clear finding by the adjudicating authority that there was nothing in the challans to establish that the payment of Rs.36,72,679/- has been made against amount of demand made under the instant show cause notice and no ST-3 return containing remark about such payments or any correspondence informing the department about the said payment has been made against the demand made under the instant show cause notice and hence the amount paid could not be considered for appropriation against the demand of Rs.1,12,54,357/-. By not filing an Appeal, Petitioner has accepted this finding and therefore that has attained finality. Petition dismissed.

Summary

Issues:
1. Challenge to an order under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
2. Determination of service tax liability for the period 2007-2012.
3. Application of pre-deposit amount in the SVLDRS declaration.
4. Lack of reasons provided in Form SVLDRS-3 for rejecting pre-deposit claim.
5. Interpretation of the show cause notice and order-in-original regarding pre-deposit amount.
6. Request for remand to consider documents submitted in SVLDRS application.

Analysis:

1. The petitioner contested an order issued under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, challenging the determined amount payable. The petitioner claimed credit for a pre-deposited sum of Rs.36,72,679, which was not considered in the initial order.

2. The case involved the determination of service tax liability for the period 2007-2012, where the petitioner was alleged to have defaulted in payment. The respondent issued a show cause notice demanding service tax, interest, and penalties, which was later confirmed through an order-in-original.

3. The petitioner filed a declaration under the SVLDRS, claiming credit for the pre-deposit amount. However, discrepancies arose in the determination of the payable amount, leading to a dispute regarding the application of the pre-deposit sum.

4. The Form SVLDRS-3 issued to the petitioner did not provide reasons for rejecting the pre-deposit claim. The court directed the Central Government to ensure that detailed reasons for rejecting declarants' submissions are provided promptly to avoid unfair practices.

5. The interpretation of the show cause notice and order-in-original regarding the pre-deposit amount was crucial. While the notice did not explicitly mention the pre-deposit, the petitioner's response acknowledged the payment, which was not challenged in an appeal, thereby accepting the adjudicating authority's findings.

6. The petitioner sought a remand to reconsider the documents submitted, citing a previous judgment. However, the court dismissed the petition, stating that the circumstances did not warrant a remand as the petitioner had accepted the findings of the adjudicating authority, thereby concluding the matter without granting the requested relief.