2023 (3) TMI 642 - HC - Service Tax

Rejection of application filed under Sabka Vishwas Legacy Dispute Resolution Scheme, 2019 - rejection on the ground that the same pertains to deposit of only interest and not tax dues as per Section 123 of The Finance Act (No.2), 2019 and thus no relief can be granted purely for the amount of interest u/S 124 of the said Act - HELD THAT - The Instructions dated 06.10.2022 issued by the Central Board of Indirect Taxes and Customs in specific terms clarified that the expression Tax Dues would include cases where interest has been demanded by a show cause notice or order in original. Revenue needs to revisit the claim of the petitioner - The Designated Committee (SVLDRS) under Sabka Vishwas Legacy Dispute Resolution Scheme 2019 /respondent No.1 is directed to reconsider the claim of petitioner and pass appropriate orders within 60 days in accordance with law keeping into account the instructions issued by Central Board of Indirect Taxes and Customs. Petition allowed.

Summary

Issues:
1. Interpretation of the term "Tax Dues" under the Sabka Vishwas Legacy Dispute Resolution Scheme, 2019.
2. Relevance of interest payments in availing benefits under the scheme.
3. Impact of instructions issued by the Central Board of Indirect Taxes and Customs on the scheme's application.

Analysis:
1. The petition challenged an order declining the acceptance of form SVLDRS-1 under the Sabka Vishwas Legacy Dispute Resolution Scheme, 2019, citing that it pertained only to interest and not tax dues as per Section 123 of The Finance Act (No.2), 2019. The court noted the initial stand that interest was not covered under the expression "Tax Dues" for the scheme but considered subsequent instructions clarifying the inclusion of interest demanded by a show cause notice or order in original as part of "Tax Dues."

2. The court highlighted the importance of the instructions issued by the Central Board of Indirect Taxes and Customs, which clarified that cases where tax dues have been paid in full before filing the application are eligible for the scheme's benefits, including waiver of interest. This clarification was provided following a directive from the High Court to remove ambiguity regarding the eligibility of cases involving interest payments.

3. Consequently, the court allowed the petition, quashing the impugned order and directing the Designated Committee under the scheme to reconsider the petitioner's claim in light of the clarified interpretation of "Tax Dues." The Committee was instructed to pass appropriate orders within 60 days, considering the instructions issued by the Central Board of Indirect Taxes and Customs. The judgment emphasized the need for the Revenue to revisit the petitioner's claim based on the clarified understanding of the scheme's provisions regarding interest payments demanded through show cause notices or orders in original.