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2023 (9) TMI 1287 - HC - Service TaxEligibility to claim benefit of SVDRS - Valuation under SVLDR Scheme - quantification of the demand on/or before 30th June, 2019, being the cut-off date specified in the SVLDR Scheme - HELD THAT - Clause (e) of Section 125(1) of the SVLDR Scheme provides for disqualification of a person who has been subjected to an enquiry or investigation or audit and the amount of duty involved in the said enquiry or investigation or audit has been quantified on/or before 30th June, 2019. In the present case, the Petitioner was subjected to audit vide letter dated 10th July, 2018 issued by Respondent No. 4. However, the amount of duty involved in the said audit was not quantified on/or before 30th June, 2019. There is no quantification of duty by the Petitioner in the letter dated 27th May, 2019. This is fortified by a letter dated 24th October, 2019 addressed by the Additional Commissioner to the Petitioner wherein there is further reference to letter dated 3rd October, 2019 and it is stated that the Petitioner has not agreed to the payment of tax/duty along with interest and penalty. These two letters of 3rd October, 2019 and 24th October, 2019 are addressed much after the cutoff date of 30th June, 2019. The quantification of duty happened only on the issuance of the show cause notice dated 14th January, 2020 which also falls after the cut-off date of 30th June, 2019. The Petitioner was thus disqualified as per clause (e) of Section 125(1) of SVLDR Scheme to make a declaration since in the Petitioner s case there has not been a quantification before the cut-off date. Section 121(r) defines quantified to mean a written communication of the amount of duty payable under the indirect tax enactment. In the instant case, the letter of the Petitioner dated 27th May, 2019 cannot be read to mean a communication of the amount of duty payable since there is no such statement in the said letter or its annexure. Bombay High Court in the case of Thought Blurb V/s. Union of India 2020 (10) TMI 1135 - BOMBAY HIGH COURT on the issue of opportunity of being heard. In the said case inspite of there being quantification of demand, the declaration under SVLDR Scheme was rejected without giving an opportunity of hearing. It was on these facts that the High Court observed that summary rejection of an application without affording any opportunity of hearing would be in violation of the principles of natural justice. The facts of the Petitioner before us are different. There is no quantification at all before the cut-off date and therefore even if an opportunity of hearing was given to the Petitioner, it would not have made any difference as to the eligibility under the SVLDR Scheme - It is settled position that a decision has to be read in the context of facts of that case and one cannot read the same dehors the facts. Therefore, for more than one reason the decision in the case of Thought Blurb is not applicable. SVLDR Scheme is a scheme aimed at liquidating legacy cases locked up in litigation at various forums. However, it does mean that the scheme should be interpreted in a way to make a disqualified person qualified to avail the benefits of the scheme, though such a scheme is in public interest inasmuch as the government can collect taxes immediately, pendency in courts gets reduced and the assessee gets relieved from uncertainty, penalties, etc. The entry into the scheme is to be interpreted strictly without doing any violence to the scheme. Any other interpretation in the garb of beneficial legislation would amount to giving the benefit of the scheme to those who are expressly not qualified. Petition dismissed.
Issues Involved:
1. Eligibility for SVLDR Scheme, 2019. 2. Opportunity of hearing before rejection under SVLDR Scheme. Summary: Issue 1: Eligibility for SVLDR Scheme, 2019 The petitioner sought relief under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme) by filing Form SVLDRS-1, which was rejected by the respondents on the ground that the "amount of duty was not quantified on/or before 30th June, 2019." The court examined whether the petitioner was eligible to avail the benefit of the SVLDR Scheme, specifically focusing on whether the duty was quantified by the cut-off date. The petitioner contended that the duty was quantified vide their letter dated 27th May, 2019. However, the court found that this letter only provided turnover details and did not quantify the duty. The quantification occurred only with the issuance of the show cause notice on 14th January, 2020, which was after the cut-off date. The court referred to Section 121(r) of the SVLDR Scheme, which defines "quantified" as a written communication of the amount of duty payable, and concluded that the petitioner's letter did not meet this criterion. The court also referenced various judicial interpretations of "quantification," including decisions from the Delhi High Court and Madras High Court, which emphasized that quantification must be determined by the department and not unilaterally by the assessee. The court concluded that the petitioner was disqualified under Section 125(1)(e) of the SVLDR Scheme, as the duty was not quantified before the cut-off date. Issue 2: Opportunity of Hearing Before RejectionThe petitioner argued that they were not given an opportunity of hearing before the rejection of their application, relying on Section 127(3) and (4) of the SVLDR Scheme. The court clarified that these provisions apply only if a person is found eligible under Section 125(1). Since the petitioner was disqualified at the threshold, the provisions for an opportunity of hearing were not applicable. The court distinguished the present case from other cases where an opportunity of hearing was required, noting that in this case, the lack of quantification before the cut-off date rendered the petitioner ineligible, making any hearing irrelevant. Conclusion:The court dismissed the petition, holding that the petitioner was not eligible for the SVLDR Scheme due to the lack of quantification of duty before the cut-off date. The court also found that the petitioner was not entitled to an opportunity of hearing under the circumstances. Rule accordingly stands discharged with no order as to cost.
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