2023 (6) TMI 649 - HC - Service Tax

SVLDRS - Power of Committee u/s 128 of the Finance Act, 2019 to review - Period of limitation - Issuance of statement to modify the same suo moto on discovering arithmetical/clerical mistake after expiry of 30 days. Whether the Designated Committee once have issued statement on 16.01.2020 vide Annexure P/5 u/s 128 of the Finance Act, 2019 review the same after expiry of 30 days i.e. on 28.02.2020? HELD THAT - It is settled principle of law in jurisprudence that in cases pertaining to provisions concerning concession/relaxation/discount/rebate, doubt if any has to be resolved in favour of the Revenue. The reason is not far to see. The principal object of a Taxing Statute is to collect revenue for the State. If the said Statute extends a benefit/ relaxation/ concession/ discount/rebate then to ensure that such concessional provisions do not offend the said principal object, the Courts have laid down that such concessional provisions under Taxing Statute are to be read in favour of Revenue in case of doubt. Moreso, it is further settled in law that whenever a statutory provision prescribes a thing to be done within a certain period of time without further stipulating the consequence of failure to do so, then the provision relating to the time period prescribed cannot be treated as mandatory. Going by the principle laid down in the case of Apex Court in UNION OF INDIA VERSUS WOOD PAPERS LTD. 1990 (4) TMI 55 - SUPREME COURT and Novopan India Ltd., Hyderabad 1994 (9) TMI 67 - SUPREME COURT , it is obvious that provision of Section 128 of the Finance Act, 2019 in case of any doubt is to be read in favour of the Revenue. More so, the non-prescription of any consequence for not reviewing the statement within 30 days is a clear indication of the fact that provision of Section 128 of the Scheme is not mandatory. As a necessary fall out, the time period of 30 days stipulated in Section 128 is relaxable if reasons are assigned by the Revenue which do not fall foul of reasonableness clause under Article 14 of Constitution. The factual matrix herein reveals that the power of review u/s 128 of the Scheme was exercised in public interest of avoiding loss to the public exchequer. Due to oversight, CENVAT CREDIT of Rs.23,52,892/- was not included while computing tax dues which led to the ultimate relief of Rs.8,97,037.20 under the Scheme, instead of the due amount of Rs.26,71,509/-. If this oversight was not detected and remedied, the Revenue would have been put to loss of Rs.17,74,472.20 (Rs.26,71,509.00 Rs.8,97,037.20). The reason assigned for delayed review cannot be termed as arbitrary and thus is saved from being sacrificed at the alter of Article 14 of the Constitution - it is obvious that the action of the Revenue which is impugned herein cannot be found fault with. Petition dismissed.

Summary

Issues:
The judgment deals with the question of whether the Designated Committee under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 can modify a statement declaring a reduced amount of tax payable after the expiry of 30 days of its issuance due to an arithmetical/clerical mistake.

Factual Background:
The petitioner's case was treated as under "litigation" under the SVLDRS Scheme, with the reduced amount payable being Rs.8,97,037.20. The petitioner paid this amount on 15.02.2020. However, the Designated Committee later issued a rectified statement increasing the tax dues to Rs.53,43,018/- and the reduced amount payable to Rs.26,71,509/-, which the petitioner did not pay, leading to the initiation of recovery proceedings.

Legal Principles Applied:
The judgment emphasizes that in cases involving concessions or relaxations in taxing statutes, any doubt should be resolved in favor of the Revenue to ensure the principal object of collecting revenue for the State is not compromised. The court cites previous decisions to support the strict interpretation of exemption provisions in favor of the Revenue.

Interpretation of Time Limits:
The judgment clarifies that when a statutory provision sets a time limit without specifying the consequences of non-compliance, such provisions are not necessarily mandatory. It highlights that substantial compliance may be sufficient, depending on the context and purpose of the provision.

Decision and Rationale:
The court concludes that the Designated Committee's review of the statement was justified in the public interest to prevent loss to the public exchequer. The oversight in including CENVAT CREDIT in the tax dues would have resulted in a significant loss to the Revenue if not corrected. The court finds the reason for the delayed review to be reasonable and not arbitrary, thus upholding the Revenue's action and dismissing the petition.

Judgment Outcome:
The petition is dismissed as lacking substance, with no costs imposed on the petitioner.