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2025 (1) TMI 1263 - HC - Service TaxChallenge to action of the designated committee formed under the Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 (SVLDRS) by issuing Form No. SVLDRS-3 dated 04.12.2019 - petitioner s case falls under the arrears category or the litigation category under SVLDRS - recovery of service tax with interest - non-payment of service tax under Construction Service in respect of Commercial and Industrial Building and Civil Structure during the period from April 2014 to June 2017. HELD THAT - Considering the provisions of the SVLDRS it is apparent and crystal clear that the case of the petitioner would fall in the category of amount in arrears as admittedly the petitioner has not preferred any appeal before 30.06.2019 challenging the Order-in-original and the demand raised in the Order-in-original amounting to Rs. 32, 27, 856/-has achieved finality so far as the petitioner is concerned and accordingly the petitioner would be entitled to the benefit of the SVLDRS which has a basic feature of reducing the disputes and create an atmosphere of trust between the assessee and the respondent-department. However in the facts of the case it appears that the designated committee contrary to the provision of the SVLDRS and with total non-application of mind has issued Form SVLDRS-2 and without taking into consideration reply of the petitioner 29.11.2019 has issued Form SVLDRS-3 in a mechanical manner. The petitioner has been vigilant to challenge such SVLDRS-3 immediately by preferring this petition and this Court has directed the petitioner to deposit 60% of the tax arrears amounting to Rs. 31, 32, 551.60 which petitioner has already deposited. Therefore in the facts of the case when there was no appeal pending filed by the petitioner the amount of demand raised in the Order-in-original would become the tax dues being the amount in arrears as per clause (e) of section 123 of SVLDRS and accordingly the petitioner is entitled to get the benefit of the provision of section 124 of the SVLDRS by paying 60% of the amount in arrears as tax dues which the petitioner has already deposited. Conclusion - i) The petitioner s case is categorized under amount in arrears as per Section 121(c) and Section 123(e) of the SVLDRS. ii) The petitioner is entitled to the relief of paying 60% of the tax dues having already deposited the amount. iii) The designated committee s issuance of Form SVLDRS-3 demanding a higher amount was incorrect and is set aside. Petition allowed.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered in this judgment are:
2. ISSUE-WISE DETAILED ANALYSIS Relevant legal framework and precedents: The SVLDRS was introduced to resolve legacy disputes related to indirect taxes. Key provisions include:
Court's interpretation and reasoning: The Court interpreted the SVLDRS provisions, emphasizing that the petitioner's case should be categorized under "amount in arrears" as no appeal was filed by the petitioner before the cut-off date of June 30, 2019. The Court noted that the designated committee's classification of the petitioner's case under "litigation" was incorrect since the department's appeal was filed after the cut-off date. Key evidence and findings: The petitioner had accepted the Order-in-Original without filing an appeal, making the demand amount final. The department's appeal was filed after the cut-off date, which should not affect the petitioner's categorization under the SVLDRS. Application of law to facts: The Court applied the SVLDRS provisions to determine that the petitioner was entitled to relief under the "arrears" category. The petitioner had deposited 60% of the tax dues, complying with Section 124(c)(ii) of the SVLDRS. Treatment of competing arguments: The petitioner argued that their case fell under the "arrears" category, supported by the fact that no appeal was pending as of the cut-off date. The respondent contended that the petitioner was not entitled to relief due to the pending departmental appeal. The Court favored the petitioner's argument, emphasizing the scheme's intent to reduce litigation and the department's appeal being filed beyond the cut-off date. Conclusions: The Court concluded that the petitioner's case falls under the "arrears" category, entitling them to the relief of paying 60% of the tax dues, which they had already deposited. 3. SIGNIFICANT HOLDINGS Core principles established:
Final determinations on each issue:
The Court ordered the respondents to complete this exercise within twelve weeks, making the rule absolute to the extent of the petitioner's entitlement under the SVLDRS.
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