2022 (9) TMI 904 - HC - Service Tax

Waiver under Sabka Vikas (Legacy Dispute Resolution) Scheme, 2019 - amount paid by the petitioner, under protest, towards interest , prior to issuance of show cause shall be considered as pre-deposit, or not - Section 24 of the Finance Act - HELD THAT - Sub-section (2) of section 124 is relevant for this case. It is noticed, on plain reading of the same, that the relief calculated under Sub-section (1) shall be subject to the condition that any amount paid as pre-deposit at any stage of appeal proceedings under the indirect tax enactment or as deposit during enquiry, investigation or audit shall be deducted when issuing the statement indicating the amount payable by the declarant. Thus, it is clear that statute itself do not make any distinction between payment of taxes, interest thereon or any penalty in amount which has been deposited during enquiry, investigation or audit shall be deducted while issuing the statement and shall be adjusted while calculating relief to the declarant. This Court is of the opinion that Section 124 of the Finance Act, 2019, is a benevolent provision. The Parliament in its wise discretion thought it proper to grant one time relief to all tax payers under the GST Scheme so that disputes can be resolved amicably and restrictive parochial interpretation of the provisions should be avoided by the Courts and also by the Authorities so that objects of the beneficial scheme can be Achieved. Therefore, this Court, even though was informed that the Scheme has already come to its conclusion and the auto-populated form has already expired, the Court is inclined to allow the writ petition. This Court direct that Form SVLDRS-3 is quashed and the Designated Committed to reconsider the claim of the petitioner within a period of three weeks from the date of receipt of certified copy of this order, after adjusting the amount paid towards interest to be specific RS. 3,19,69,680/- in accordance with law - Petition allowed.

Summary

Issues:
1. Interpretation of Section 124 of the Finance Act, 2019 regarding pre-deposit under the 'Sabka Vikas (Legacy Dispute Resolution) Scheme, 2019'.
2. Consideration of amount paid under protest towards interest before issuance of show cause notice as pre-deposit under the Scheme.

Analysis:
1. The petitioner sought a writ of certiorari to quash Form SVLDRS No. 3 issued by the respondents and requested a writ of mandamus to adjust the amount deposited. The key issue was whether the amount paid by the petitioner under protest towards interest before the show cause notice would be considered as a pre-deposit under the 'Sabka Vikas (Legacy Dispute Resolution) Scheme, 2019' under Section 124 of the Finance Act, 2019.

2. The petitioner argued that a similar issue was decided by the Punjab and Haryana High Court, where the pre-deposit included a penalty along with interest. The respondents raised technical issues regarding the expiration of the auto-populated forms. However, it was acknowledged that the scheme was initially till 31.03.2020, later extended to 30.06.2020.

3. Section 124(2) of the Finance Act, 2019 was crucial in this case. It mandated that any amount paid as pre-deposit during appeal proceedings or investigations should be deducted when issuing the statement of payable amount. The High Court of Punjab and Haryana emphasized that the provision did not differentiate between amounts paid under different heads, requiring deductions for any pre-deposit made during investigations, irrespective of the nature of the payment.

4. The Court aligned with the Punjab and Haryana High Court's interpretation, emphasizing the need to consider all amounts paid during investigations for relief calculation. The Court allowed the writ petition, quashed the comments of the Designated Committee, and directed a reconsideration of the claim by adjusting the amounts paid towards interest and penalty.

5. Despite technical objections, the Court viewed Section 124 as a benevolent provision aimed at resolving tax disputes amicably. The Court allowed the writ petition, quashed Form SVLDRS-3, and directed the Designated Committee to reconsider the claim after adjusting the amount paid towards interest, emphasizing the scheme's objectives.

6. The Court's decision was based on a harmonious interpretation of the Finance Act, 2019, to achieve the scheme's beneficial objectives. The writ petition was allowed, directing the Designated Committee to reconsider the claim after adjusting the amount paid towards interest within a specified timeframe.

7. In conclusion, the Court's judgment highlighted the importance of interpreting legal provisions in line with the scheme's objectives to facilitate amicable dispute resolution and avoid restrictive interpretations that hinder the scheme's purpose.