2023 (6) TMI 150 - HC - Service Tax

Validity of SVLDRS-3 filed - amount in arrears - Rule 2(b) of Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 - It is submitted that, as SVLDRS-3 impugned in the present case has not recorded reasons for discarding the objections raised under SVLDRS-2A, it is apparent that the Authority has rejected the contentions which are apparently contrary to law in light of the submissions made and requires to be set aside. HELD THAT - The said Form does assign any reason to reject the objections raised in SVLDRS-2A. Accordingly, the manner of consideration is not evident except for the conclusion. Prima facie, there appears to be ground for reconsideration of the contentions raised with an open mind, despite the conclusion already having been arrived at. The Authority to take note of the contentions and observations passed and to re-look into the matter. The Authority to keep in mind the scope of Section 126 read with Rule 6 of Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 and reconsider the matter. If SVLDRS-2A has a column 'Reasons for Disagreement' and the assessee has detailed such reasons, the authority ought to have assigned at least brief reasons in the remarks column in SVLDRS-3 while deciding on the quantification and rejecting the 'Reasons for Disagreement'. The matter is remitted to the Authority for reconsideration.

Summary

Issues:
The petitioner challenged SVLDRS-3 issued by the Designated Committee and sought a writ of mandamus for reconsideration of tax dues, specifically related to renting of immovable property service and other taxable services.

Summary:
The petitioner declared taxable services as "Renting of immovable property Service" in Form ST-3 but also made an erroneous declaration under "Other taxable services" which was a duplicate entry. The petitioner requested a fresh computation of tax dues under SVLDRS-3, highlighting the discrepancy in the declarations.

The petitioner pointed out the error in the ST-3 return, emphasizing that duty must be collected only for actual services rendered. During the personal hearing, all contentions were raised, including the discrepancy in the declarations.

The petitioner argued that the Authority must verify declarations as per Section 126 of the Scheme, which involves checking all particulars furnished by the declarant. Reference was made to a judgment of the High Court of Bombay regarding the powers of the Designated Committee in verifying claims.

The petitioner questioned whether the Designated Committee could quantify duty based on mistaken declarations that did not reflect actual services rendered. The lack of reasons in SVLDRS-3 for discarding objections raised under SVLDRS-2A was highlighted as a flaw requiring the order to be set aside.

The Revenue contended that the Designated Committee acts based on final returns filed by the petitioner and cannot go beyond self-assessment. The Authority's decision on SVLDRS-3 was defended as considering all aspects and rejecting the petitioner's contentions.

The Court set aside the order SVLDRS-3 and remitted the matter to the Authority for reconsideration, emphasizing the need to review the contentions with an open mind and provide reasons for decisions. The Court did not express any opinion on the merits of the case.