2025 (2) TMI 1018 - HC - Service Tax

Levy of service tax on the operation of air-conditioned buses - rejection of Sabkha Vishwas (Legacy Dispute Resolution) Scheme 2019 - whether the petitioner was eligible for relief under the scheme based on the notices received and the rejection order? - HELD THAT - The Karnataka High Court in M/S. JAGADISH ADVERTISING 2020 (8) TMI 788 - KARNATAKA HIGH COURT had held that creation of a remarks column and assigning reasons for rejection by the Designated Committee under the scheme was not permissible as there was no such prescription in the statutory form. Consequently the Learned Single Judge set aside the order of rejection as the committee did not have any authority to go into such reasons. In the present case the Designated Committee had set out the reasons for rejection as filing of bogus certificates and notices. This Court is of the opinion that where applications had been filed by producing documents which are not genuine the same can be rejected by the Designated Committee. Any other view would mean that a person claiming the benefit of the scheme can come forward with any kind of document and the Designated Committee is precluded from going into the question of whether the said document is genuine or not. Such a view would result in extreme situations. Conclusion - The petitioner was not entitled to the benefits of the scheme due to insufficient evidence to support eligibility. There are no reason to interfere with the order of rejection of the application of the petitioner and accordingly the Writ Petition is dismissed.

Summary

The High Court of Andhra Pradesh considered a case where the petitioner, who operates air-conditioned and non-air-conditioned buses under contract carriage permits, received a notice to register with the Tax Department and pay service tax on the operation of air-conditioned buses. The petitioner applied under the "Sabkha Vishwas (Legacy Dispute Resolution) Scheme, 2019" for a one-time settlement of service tax disputes but later received a rejection order and approached the Court via a Writ Petition.The core legal issue revolved around whether the petitioner was eligible for relief under the scheme based on the notices received and the rejection order. The Court analyzed the relevant legal framework of the scheme, which allowed for voluntary disclosure and compounding of tax liabilities. The Court considered the petitioner's contentions regarding the notices received and the communication from the Central Tax authorities.The Court examined the arguments presented by both parties, including the respondent's contentions that the petitioner's application under the scheme was misleading and that there were discrepancies in the figures provided to different tax authorities. The respondents also challenged the authenticity of the communication from the Central Tax authorities and the quantum of tax liability assessed.The Court highlighted that the scheme applied to tax dues under various Acts, including the Central Excise Act and Finance Acts, and required a show-cause notice quantifying the amount payable by the taxpayer before a specified date for eligibility. The Court found that the notices received by the petitioner did not meet the criteria for benefiting from the scheme.In considering precedents, the Court referred to a Division Bench judgment regarding the sufficiency of a notice quantifying service tax liability for scheme eligibility. The Court also cited a Karnataka High Court decision regarding the rejection of applications under the scheme based on reasons not prescribed in the statutory form.Ultimately, the Court concluded that the petitioner was not entitled to the benefits of the scheme due to insufficient evidence to support eligibility. The Court upheld the rejection of the petitioner's application and dismissed the Writ Petition, emphasizing that the Designated Committee had valid reasons for rejection based on the documents produced. The Court found no grounds to interfere with the rejection order and ruled in favor of the respondents, with no costs awarded to either party.In summary, the High Court of Andhra Pradesh analyzed the petitioner's eligibility for relief under the Sabkha Vishwas Scheme, 2019, based on the notices received, rejected the petitioner's application, and dismissed the Writ Petition. The Court's decision was guided by the legal framework of the scheme, the authenticity of documents, and the quantification of tax liabilities as per the scheme's requirements.