2023 (10) TMI 505 - HC - Service Tax

Eligibility for Sabka Vishvas (Legacy Dispute Resolution) Scheme, 2019 - issuance of direction to respondent No. 4 to accept the declaration dated 13.12.2019 filed by the petitioner. The grievance of the petitioner is that the application of the petitioner could not be rejected under Sabka Vishvas (Legacy Dispute Resolution) Scheme, 2019 on the ground that investigation was pending and the amount of duty was not quantified in the case of the petitioner on or before 30.06.2019. HELD THAT - Section 2 (6) of the scheme defines quantified as a written communication of the amount of duty payable under the indirect tax enactment. It is clarified that such written communication will include a letter intimating duty demand or duty liability admitted by the person during enquiry, investigation or audit or audit report etc. - Since the amount of Rs. 2,70,18,141 was quantified before 30.06.2019, the petitioner was eligible to file a declaration under the Amnesty Scheme. The matter is remanded back to respondent No. 4 to pass fresh order under the Sabka Vishvas (Legacy Dispute Resolution) Scheme, 2019 (P-15) by treating the taking into consideration the letter dated 13.05.2019 (P-13) making the petitioner eligible under the scheme - petition allowed by way of remand.

Summary

Issues:
The judgment involves the challenge to an order declaring the petitioner ineligible under Section 125 (1) (e) of the Finance (No. 2), 2019 to file a declaration under the Sabka Vishvas (Legacy Dispute Resolution) Scheme, 2019, and a prayer for the acceptance of the petitioner's declaration.

Details:
The petitioner faced financial difficulties in 2017 and was notified by the tax authorities for non-payment and non-filing of service tax returns. The petitioner responded by submitting replies and making multiple deposits towards the pending tax liability. Despite making substantial payments, the tax authorities continued to demand further amounts, including interest and penalties. Ultimately, the petitioner cleared the entire service tax liability with interest and penalty by April 2019.

Details:
A letter dated 16.03.2023 highlighted the sequence of deposits made by the petitioner in response to the tax authorities' demands. The petitioner deposited varying amounts at different intervals, totaling to Rs. 75 lacs, and eventually cleared the entire service tax liability by April 2019. The tax authorities, however, claimed that the petitioner had short-paid interest for the period, leading to further demands for payment.

Details:
The petitioner argued that as the duty amount was quantified before 30.06.2019, they were eligible to file a declaration under the Sabka Vishvas (Legacy Dispute Resolution) Scheme, 2019. Referring to a circular, the petitioner contended that the duty demand being quantified before the specified date made them eligible for the scheme. The court agreed with this interpretation and set aside the order declaring the petitioner ineligible, remanding the matter back to reconsider the petitioner's eligibility under the scheme based on the quantified duty amount before the deadline.

This judgment emphasizes the importance of timely quantification of duty amounts for eligibility under tax amnesty schemes and highlights the significance of clear communication between taxpayers and tax authorities in resolving disputes.