2024 (3) TMI 288 - HC - Service Tax

Application filed by the petitioner under the Sabka Vishwas Legacy Disputes Resolution Scheme-3 (SVLDRS-3) - petitioner contends that the categorization of the petitioner's application as arrears was incorrect because the final hearing of the original adjudication took place after 30.06.2019 - HELD THAT - The admitted position is that no hearing was held thereafter. While learned counsel for the petitioner points out that the adjudicating authority waited for one month thereafter, the fact that the adjudicating authority waited for one month before issuing orders does not mean that the final hearing took place after 30.06.2019. Hence, the conclusion that the petitioner's case falls within the category arrears and not within the category litigation contains no infirmity. The other aspect on which the order was challenged was non-consideration of interest. As contended by learned counsel for the petitioner, sub-section 2 of Section 124 uses the expression any amount paid as pre-deposit . This provision was interpreted by this Court in M/S. VAMSEE OVERSEAS MARINE PRIVATE LIMITED VERSUS THE COMMISSIONER OF SERVICE TAX, DESIGNATED COMMITTEE 2021 (2) TMI 801 - MADRAS HIGH COURT wherein it was held that the applicant under the Scheme is entitled to credit in respect of interest payment also. In order to claim credit for interest, it is necessary for the petitioner to place on record relevant documents and establish the claim. This exercise cannot be undertaken by this Court. However, in order to enable the petitioner to place relevant documents before the respondents, the impugned order calls for interference. The impugned order is set aside only with regard to the computation of pre-deposit amount and the matter is remanded for reconsideration - Petition disposed off.

Summary

Issues involved:
The judgment involves a challenge to an order under the Sabka Vishwas Legacy Disputes Resolution Scheme-3 (SVLDRS-3) regarding the categorization of the petitioner's application and the consideration of interest payment.

Categorization of Application:
The petitioner, a former assessee under the Service Tax regime, challenged the categorization of their application as "arrears" instead of "litigation" due to the final hearing of the original adjudication taking place after 30.06.2019. The petitioner argued that interest payment was not recognized in the pre-deposit amount, which included an interest component of Rs. 11,41,343. The petitioner relied on the interpretation of "any amount paid as pre-deposit" in Section 124 of the Scheme based on the judgment in Vamsee Overseas Marine Pvt. Ltd. v. Commissioner of Service Tax, Chennai.

Contentions of the Parties:
The petitioner's counsel highlighted that the final hearing extended beyond 31.05.2019, justifying the application falling under the category of "litigation." Moreover, the petitioner's interest payment was not considered in the pre-deposit amount, contrary to the provisions of the Scheme and relevant case law. On the other hand, the respondents' standing counsel argued that the final hearing concluded before 30.06.2019, warranting the categorization as "arrears," and claimed that the petitioner did not provide evidence of interest payment during the personal hearing.

Judgment and Remand:
The court observed that the final hearing indeed occurred before 30.06.2019, supporting the categorization of the petitioner's case as "arrears." However, regarding the interest payment issue, the court agreed with the petitioner's interpretation of Section 124 and the precedent set by Vamsee Overseas. Consequently, the court set aside the order concerning the computation of the pre-deposit amount and remanded the matter for reconsideration. The first respondent was directed to allow the petitioner a reasonable opportunity, including a personal hearing, and to issue fresh orders within three months from the date of the court's order.

Conclusion:
The court disposed of the writ petition by setting aside the order on the pre-deposit amount computation and remanding the matter for further consideration. The court emphasized providing the petitioner with a fair opportunity to present relevant documents regarding interest payment for a proper assessment within a specified timeframe.