2023 (6) TMI 8 - HC - Central Excise

Rejection of application filed under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - rejection on the ground that the demand was not finally quantified nor communicated to the party on or before 30.06.2019 - HELD THAT - Admittedly, there is no difference between the tax dues as quantified in the show cause notice dated 09.08.2019 and the tax dues as quantified in the communications sent by the petitioner. However, in the show cause notice, a three-month period, which was prior to five years from the date of the show cause notice, has not been considered, apparently, for the reason that it was beyond limitation. The petitioner in its calculation had included the said amount as well - This Court had also called upon the respondents to produce the original files, which also indicate that at no stage, the quantification of the tax dues submitted by the petitioner was challenged, doubted or disputed. On the contrary, it is apparent that the respondents had accepted the quantification of the excise duty as disclosed by the petitioner and had proceeded on that basis. It is contended on behalf of the respondents that tax dues quantified by the petitioner in its communication cannot be considered as quantified tax dues for the purposes of the Scheme because the investigations continued till the issuance of the show cause notice dated 09.08.2019. According to the respondents, the tax dues could be considered as quantified only on completion of the investigation and on the concerned officer, issuing the show cause notice or any communication quantifying the amount due - The contentions advanced by the respondent are not merited. Tax dues as quantified in any communication emanating from the the tax payer, would qualify as tax dues if there is no dispute regarding the same. The Scheme also covers cases where investigations, enquiries and audit are pending. The Scheme was introduced by the enactment of the Finance Act No. 2 of 2019. Chapter V of the Act (Sections 120 to 135) provided the statutory framework for the Scheme. Section 122 of the Act specified various enactments, which were covered under the Scheme. There are two components of the Scheme. One is dispute resolution and one is amnesty. The dispute resolution component is intended to put an end to disputes that are pending in various forums. The amnesty component is intended to give tax payers, who have not correctly discharged their liability, to come clean and pay their tax dues. The Scheme covers not only cases where show cause notice has been issued and disputes are pending before various authorities but also cases where enquiry, investigation or audit is pending against an assessee. In addition, it also covers cases where there was no dispute as to the arears as well as cases where tax payers had come forward to voluntarily disclose their tax liability - petitioner had applied in the category where enquiry, investigation or audit is pending. The controversy involved in the present petition is squarely covered by the recent decision of this Court in Hans Uttam Finance Limited v. Principal Commissioner of Central Excise, Goods and Service Tax, Delhi South Commissionerate Ors. 2023 (5) TMI 812 - DELHI HIGH COURT . In the said case, this Court had examined various provisions of Chapter V of the Act and the legislative scheme, and had held that Clearly, in cases where the Department is proceeding on the basis of certain quantification, although not mentioned in any written communication issued by the Department but admitted by the taxpayer in writing; the same would satisfy the definition of the term quantified under Section 121(r) of the Finance Act (No.2), 2019. In the present case, there is no controversy as to the amount of central excise payable in respect of goods cleared from the Delhi Warehouse. The petitioner had admitted its liability in the initial stages and had voluntarily disclosed the same in its communications. The respondents have proceeded and accepted the quantification. However, the respondents had not accepted payments in discharge of the liability on the ground that the same had been filed under their code pertaining to the petitioner s place of business in Coimbatore. The impugned decision of the Designated Committee rejecting the petitioner s declaration on the ground that tax dues are not quantified, is rejected - petition allowed.

Summary

Issues Involved:
1. Whether the tax dues were quantified for the purposes of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
2. Whether the rejection of the petitioner's application under the Scheme was justified.

Summary:

1. Quantification of Tax Dues:
The primary issue was whether the 'tax dues' were quantified for the purposes of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The petitioner claimed that there was no controversy regarding the amount of tax dues, which were quantified and communicated to the authorities. The petitioner had paid the duty, interest, and penalty, but the respondents did not accept the same on the grounds that the payments were made under the GST Registration Number of a different unit.

2. Rejection of Application:
The Designated Committee rejected the petitioner's application under the Scheme, stating that the demand was not finally quantified nor communicated to the party on or before 30.06.2019. The respondents contended that since investigations continued beyond 04.06.2019 and a show cause notice was issued on 09.08.2019, the tax dues were not quantified before the stipulated date.

Detailed Judgment:

Quantification of Tax Dues:
The court examined the context and noted that the petitioner had provided all necessary details and had communicated the quantification of tax dues to the authorities. The court emphasized that the Scheme covers cases where investigations, enquiries, and audits are pending and that the tax dues quantified in any communication from the taxpayer would qualify as 'tax dues' if there is no dispute regarding the same. The court referred to the definition of 'quantified' under Section 121(r) of the Act, which means a written communication of the amount of duty payable under the indirect tax enactment.

Rejection of Application:
The court found that the respondents had accepted the quantification of the excise duty as disclosed by the petitioner and had proceeded on that basis. The court concluded that the contention that tax dues would be quantified only on the culmination of investigation and issuance of a show cause notice was unmerited. The court held that the quantification of tax dues was ascertainable from the written communication on record and that the petitioner had discharged its entire liability as required under the Scheme.

Conclusion:
The court allowed the petition, rejecting the impugned decision of the Designated Committee and directed the respondents to issue the Discharge Certificate as contemplated under the Scheme within four weeks. The court emphasized that there was no dispute regarding the amount of tax paid by the petitioner and that the petitioner had fulfilled its obligations under the Scheme. The parties were left to bear their own costs.