2022 (11) TMI 634 - HC - Service Tax

Rejection of Application under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) - rejection on the ground that the amount of duty in the case of Petitioners was not quantified on or before 30th June, 2019 - HELD THAT - Section 125(1)(e) does not disqualify a person who has been issued a show cause notice after 30 th June, 2019. It only says if a person has been subjected to an inquiry or investigation or audit and the amount of duty involved in the said inquiry or investigation or order has not been quantified on or before 30th June, 2019. The only requirement therefore is to see whether the amount of duty involved has been quantified on or before 30th June, 2019. The answer to this is, amount of duty has been quantified. In the reconciliation statement submitted, copy whereof is at Annexure-D to the Petition, the amount of duty payable has been quantified as Rs.97,82,935/-. In the statement of Petitioner No.2, recorded on 26 th June, 2019, copy whereof is at Exh.-C to the Petition, in answer to question No.6, an amount of Rs.97,82,935/- (48,00,700 49,82,235) has been admitted. Out of this, Rs.48,00,700/- has been paid by Petitioner and what was remaining was only Rs.48,82,235/-. Even in the impugned order, Respondents have in paragraph No.2 stated as per the DGGI report amount quantified before 30.06.2019 was Rs.97,82,935/- . Therefore before 30 th June, 2019 the amount of duty involved has been quantified. The Petitioner was eligible to make a declaration, and since Petitioner agrees and Mr. Jain orally also stated Petitioner agrees, with the estimated amount payable as communicated in the SVLDRS-2 issued by Respondents, Respondents are directed to issue Form-3 within two weeks of this order being uploaded so that Petitioner can pay the remaining amount and close the file - petition disposed off.

Summary

Issues:
Impugning order under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Eligibility criteria under Section 125(1)(e) - Quantification of duty before 30th June, 2019 - Reconciliation statement and admission of liability - Show cause notices - Interpretation of relevant legal provisions - Application rejection and judicial review.

Analysis:

1. The petitioner challenged an order rejecting their application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, citing non-quantification of duty before 30th June, 2019. The petitioner, engaged in providing services, admitted to a short payment of service tax and deposited a partial amount during proceedings. The statement of the petitioner's director confirmed the liability amount. The respondent issued show cause notices and raised demands, leading to the petitioner's application under the SVLDRS scheme.

2. The court examined the eligibility criteria under Section 125(1)(e), emphasizing that disqualification occurs if the duty amount is not quantified by the specified date. The reconciliation statement and the director's statement quantified the duty payable before 30th June, 2019. The court noted that the duty amount was quantified as Rs.97,82,935, with a partial payment made by the petitioner, leaving a balance amount. The court highlighted the respondent's acknowledgment of the quantification before the deadline.

3. The court addressed the respondent's reliance on FAQ No.53 and referred to a relevant case law emphasizing the quantification of duty demand before the specified date for eligibility under the scheme. The court cited specific clauses from notifications and circulars to support the interpretation of the term "quantified." It clarified that admission of duty liability during an inquiry or audit falls within the definition of quantification under the SVLDRS.

4. Considering the facts and legal provisions, the court held that the petitioner was eligible to make a declaration under the scheme. The court directed the respondents to issue the necessary form for payment within two weeks, allowing the petitioner to settle the remaining amount and conclude the matter. The petition was disposed of without any costs awarded.

This detailed analysis of the judgment provides a comprehensive overview of the issues involved, the court's reasoning, and the final decision rendered by the Bombay High Court in this case.