2025 (1) TMI 79 - HC - Service Tax

Rejection of the application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) - grievance of the respondent before the learned Single Judge was that, it was ready and willing to pay the amount as notified by the appellants in Form No. 2 for availing the benefit of the SVLDR scheme. HELD THAT - The learned Single Judge has in the impugned order given a finding that the impugned communication dated 30.01.2020 is contrary to the circular dated 12.12.2019 which is issued regarding the applicability and maintainability of the scheme. In fact, the learned counsel for the appellants would concede to the fact that, the circular dated 12.12.2019 do not contemplate a situation wherein the audit having been carried out before 30.06.2019, an action can be taken after that date, more so when the appellants have issued Form No. 2 and the respondent submitted Form 2A - the appellants concede that, the Form No. 2 which was issued to the respondent has not been withdrawn. Conclusion - The timelines granted by the learned Single Judge are extended by 15 days, 4 weeks and 2 weeks respectively from the date of receipt of a certified copy of this order. Appeal dismissed.

Summary

1. ISSUES PRESENTED and CONSIDERED

The legal judgment primarily revolves around the following core issues:

a) Whether the rejection of the application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) by the appellants was justified.

b) Whether the issuance of Form No. 2 by the appellants and subsequent submission of Form 2A by the respondent entitled the respondent to the issuance of Form No. 3 under the SVLDRS.

c) Whether the communication dated 31.01.2020 was contrary to the circular dated 12.12.2019 regarding the applicability of the SVLDRS.

d) The validity of the objection raised by the appellants post the cutoff date of 30.06.2019.

2. ISSUE-WISE DETAILED ANALYSIS

a) Rejection of the SVLDRS Application

Legal Framework and Precedents: The SVLDRS was introduced to resolve legacy disputes under indirect tax laws. The scheme provides a mechanism for taxpayers to declare their tax dues and settle disputes.

Court's Interpretation and Reasoning: The court analyzed whether the rejection of the respondent's application under the SVLDRS was in accordance with the provisions of the scheme and relevant circulars.

Key Evidence and Findings: The appellants issued Form No. 2 to the respondent, who then submitted Form 2A, indicating agreement with the tax quantification.

Application of Law to Facts: The court noted that the issuance of Form No. 2 and submission of Form 2A should have led to the issuance of Form No. 3, allowing the respondent to pay the tax liability.

Treatment of Competing Arguments: The appellants argued that the audit was not finalized, and the rejection was justified. The respondent contended that the rejection was contrary to the scheme's provisions.

Conclusions: The court concluded that the rejection was unjustified as the necessary follow-up actions under the scheme were not completed by the appellants.

b) Issuance of Forms under SVLDRS

Legal Framework and Precedents: The SVLDRS outlines a process involving the issuance of various forms to facilitate dispute resolution.

Court's Interpretation and Reasoning: The court examined the procedural aspects of the scheme and the obligations of the parties involved.

Key Evidence and Findings: Form No. 2 was issued, and Form 2A was submitted by the respondent, but Form No. 3 was not issued by the appellants.

Application of Law to Facts: The court found that the appellants' failure to issue Form No. 3 was contrary to the scheme's process.

Treatment of Competing Arguments: The appellants claimed procedural deficiencies, while the respondent asserted compliance with the scheme's requirements.

Conclusions: The court held that the appellants were required to issue Form No. 3, enabling the respondent to settle the tax dues.

c) Validity of Communication Dated 31.01.2020

Legal Framework and Precedents: The circular dated 12.12.2019 provided guidance on the SVLDRS applicability and maintainability.

Court's Interpretation and Reasoning: The court scrutinized the communication's alignment with the circular and the scheme's objectives.

Key Evidence and Findings: The communication rejected the respondent's declaration under the SVLDRS.

Application of Law to Facts: The court determined that the rejection was inconsistent with the circular's provisions, which did not allow post-30.06.2019 actions to affect eligibility.

Treatment of Competing Arguments: The appellants argued for the communication's validity, while the respondent highlighted its inconsistency with the circular.

Conclusions: The court found the communication invalid as it contradicted the circular's guidance.

3. SIGNIFICANT HOLDINGS

"The conclusion drawn by the learned Single Judge cannot be faulted." This statement encapsulates the court's agreement with the lower court's decision, reinforcing the respondent's entitlement under the SVLDRS.

Core Principles Established: The judgment emphasizes adherence to procedural requirements under the SVLDRS and the importance of consistency with circulars guiding the scheme's application.

Final Determinations on Each Issue: The court dismissed the appeal, upholding the respondent's rights under the SVLDRS and extending the timelines granted by the Single Judge for compliance.

The judgment underscores the necessity for administrative actions to align with statutory schemes and related guidelines, ensuring fair and consistent application of tax dispute resolution mechanisms.