2024 (8) TMI 1106 - HC - Service Tax

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - non-filing of ST-3 returns - Circular No. 1074/07/2019-CX dated 12th December 2019 - HELD THAT - From the impugned order dated 19th June 2023 it appears that respondent no. 3 has admitted in paragraph 14 that petitioner has discharged its liability for Financial Year 2016-2017 and 2017-2018 as per the declaration filed under the SVLDR Scheme - notwithstanding the outcome of Financial Year 2015-2016, in our view, petitioner certainly be entitled for issuance of Form-4 for Financial Year 2016-2017 and 2017-2018. Therefore, respondent no. 3 is directed to issue Form 4 for Financial Year 2016-2017 and 2017-2018 within one week of this order being uploaded. The show cause notice cum demand notice dated 30th December 2020, which is also impugned in the petition, is quashed and set aside - The time to issue fresh show cause notice, if required for Financial Year 2015-2016 is extended for a period of 30 days after the disposal of petitioner's declaration for Financial Year 2015-2016 - Petition disposed off.

Issues:
1. Interpretation of declarations under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
2. Adjustment of payments made before adjudication under Circular No. 1074/07/2019-CX.
3. Entitlement to Form-4 under the SVLDR Scheme for different financial years.
4. Quashing of show cause notice cum demand notice dated 30th December 2020.

Analysis:

The judgment by the Bombay High Court, delivered by K.R. Shriram & Jitendra Jain, JJ., addresses various issues. Firstly, the petitioner had filed declarations under the Sabka Vishwas Scheme, where a discrepancy arose regarding the payment made. The petitioner paid an amount but faced rejection due to an alleged request for more time to pay, which was deemed erroneous. The court acknowledged the payment made by the petitioner and directed the respondents to provide a personal hearing to clarify the payment's allocation for the specific financial year 2015-2016. The court emphasized the need for proper verification before rejecting declarations.

Secondly, the judgment delves into the interpretation of Circular No. 1074/07/2019-CX, which allows for adjustments of payments made before adjudication. The court highlighted the importance of recognizing and appropriating such deposits as revenue, especially in cases where deposits could not be appropriated due to pending adjudication proceedings. This clarification aimed to facilitate taxpayers and ensure fair treatment in adjusting payments during the declaration process.

Furthermore, the court addressed the issue of entitlement to Form-4 under the SVLDR Scheme for different financial years. Despite the unresolved matter concerning the financial year 2015-2016, the court directed the issuance of Form-4 for financial years 2016-2017 and 2017-2018 within a specified timeframe. This decision was based on the acknowledgment that the petitioner had already discharged liabilities for the latter financial years, emphasizing the need for timely resolution and issuance of necessary forms.

Lastly, the judgment concluded by quashing the show cause notice cum demand notice dated 30th December 2020. The court extended the time for issuing a fresh show cause notice, if required, for the financial year 2015-2016, providing the petitioner with a 30-day period post the disposal of the declaration for that specific year. This extension allowed the petitioner to take necessary legal steps in response to any potential future notices, ensuring procedural fairness and compliance with the law.

In summary, the judgment provides a comprehensive analysis of the issues surrounding the Sabka Vishwas Scheme, payment adjustments, entitlement to Form-4 under the SVLDR Scheme, and the quashing of specific notices, emphasizing the importance of procedural fairness and proper verification in resolving tax-related disputes.

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