2024 (3) TMI 187 - HC - Service Tax

Benefit of SVLDRS - Bar imposed by an enquiry / investigation or audit post 30.06.2019 against filing a declaration under Sabka Vishwas (Legacy Dispute Scheme) 2019 - HELD THAT - The impugned order is liable to be set aside inasmuch as the impugned order proceeds on the erroneous premise that since an investigation was initiated prior to filing of the declaration by the petitioner under the Scheme, the same would be hit by embargo contained in Section 125 (i)(e) of the Act - The above provision had come up for consideration and it has been held by the Bombay High Court that on a cumulative / conjoint reading of clauses (e) and (f) to Section 125(1) of the Act it would be evident that the embargo against filing a declaration on the premise that the declarant has been subjected to an enquiry on investigation would only relate to an enquiry or investigation which has been initiated on or before 30.06.2019. In the present case admittedly the investigation was initiated by a issuance of a summon only on 26.09.2019 and thus the rejection / withdrawal of the discharge certificate by invoking Section 125(i)(e) is unsustainable. It may be relevant to refer to the relevant portions of the decision of the Bombay High Court in the case of M/S. NEW INDIA CIVIL ERECTORS PRIVATE LIMITED VERSUS UNION OF INDIA AND OTHERS 2021 (3) TMI 545 - BOMBAY HIGH COURT wherein it was held respondent No. 4 was not justified in rejecting the declaration of the petitioner dated 26-12-2019 on the ground that petitioner was not eligible to file declaration under the category of voluntary disclosure since enquiry was initiated against the petitioner on 19-12-2019 whereafter petitioner flied declaration. Though other contentions were raised viz., that the impugned order suffers from violation of principles of natural justice and the impugned order by a member of the Designated Committee revoking / cancelling the discharge certificate by the Designated Committee is without jurisdiction, since this Court has already found that the reason which prompted the respondent to withdraw / revoke / cancel the discharge certificate viz., an enquiry / investigation initiated post 30.06.2019 cannot be a bar against the petitioner filing a declaration under the scheme, the above contentions need not be examined. The writ petition is disposed off.

Summary

Issues Involved:
1. Authority to revoke the Discharge Certificate.
2. Validity of investigation post 30.06.2019 as a bar under SVLDRS.
3. Alleged violation of principles of natural justice.

Summary:

1. Authority to Revoke the Discharge Certificate:
The petitioner challenged the impugned order on the ground that the respondent, a member of the Designated Committee, does not have the power to revoke the Discharge Certificate issued by the Designated Committee. The court did not delve into this issue in detail as the primary contention was resolved on other grounds.

2. Validity of Investigation Post 30.06.2019:
The core issue was whether an enquiry, investigation, or audit initiated after 30.06.2019 imposes a bar against filing a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS). The petitioner received a summon on 26.09.2019, and the declaration was filed on 23.11.2019. The court referred to Section 125(1)(e) of the Finance (No.2) Act, 2019, which states that a person subjected to an enquiry or investigation, where the amount of duty has not been quantified before 30.06.2019, is ineligible to file a declaration. The court cited the Bombay High Court's decision in New India Civil Erectors Private Limited vs. Union of India, which clarified that the embargo applies only if the enquiry or investigation was initiated on or before 30.06.2019. As the investigation in this case commenced on 26.09.2019, the court held that the rejection of the discharge certificate was unsustainable.

3. Alleged Violation of Principles of Natural Justice:
The petitioner argued that the impugned order was made unilaterally, violating principles of natural justice and Article 14 of the Constitution of India. However, the court did not examine this contention in detail, as the primary issue was resolved on the basis of the timing of the investigation.

Conclusion:
The court set aside the impugned order, holding that the investigation initiated post 30.06.2019 cannot bar the petitioner from filing a declaration under the SVLDRS. The writ petition was disposed of, and the impugned order was declared void. No costs were imposed, and connected miscellaneous petitions were closed.