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2025 (2) TMI 1060 - HC - Service TaxDisqualification under Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 - HELD THAT - Since there is no proof on record that there was any investigation on the date when the Petitioner applied to avail the benefit under the Scheme and the fact that the orders disqualifying the Petitioner which have been passed are also completely unreasoned and one-line orders this Court is of the opinion that the Petitioner is entitled to relief. However the scheme is no longer operational. Under these circumstances it is directed that the declaration of tax liability of Rs. 11, 26, 937/- be accepted by the Department. Subject to the said amount being deposited within a period of one month the impugned show cause notice dated 31st December 2020 shall stand quashed. If the said amount is not deposited within one month the impugned show cause notice dated 31st December 2020 shall automatically revive and the Petitioner is permitted to file a reply to the same. The proceedings under the impugned show cause notice would then proceed in accordance with law. Petition disposed off.
The present case involves a petition filed under Articles 226 and 227 of the Constitution of India challenging a Show Cause Notice dated 31st December, 2020 passed by the Deputy Commissioner, Central Tax, Goods and Services Tax, Gurugram. The petitioner, Daljeet Singh Gill, operates a business under the name M/s Dhartiputra Infotech Inc., providing Consultation (Business Auxiliary Services). The petitioner allegedly failed to deposit service tax for the Financial Year 2015-2016 and 2016-2017. The petitioner sought resolution of past disputes under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, but the respondents rejected the plea without providing a reason, leading to the petition.The key issues considered in the judgment are as follows:1. Rejection of the petitioner's application under the Sabka Vishwas Scheme:The petitioner applied for the Scheme on two occasions, but both applications were rejected by the respondents. The rejection was based on certain notices and clauses of the Scheme disqualifying the petitioner. The court examined the notices and email communications relied upon by the department to disqualify the petitioner.The court directed the petitioner and the department to produce evidence regarding the notices and their service to the petitioner. The department failed to provide proof of service of the notices, leading the court to conclude that the petitioner's disqualification under the Scheme was unjustified. The court highlighted that unless there was a pending investigation, disqualification under the Scheme was not warranted.The court also referred to a circular issued by the Central Board of Indirect Taxes and Customs clarifying the provisions of Clause 125(1)(f) of the Scheme. Since there was no evidence of any investigation at the time of the petitioner's application, the court held that the petitioner was entitled to relief. However, as the Scheme was no longer operational, the court directed the department to accept the declaration of tax liability by the petitioner.2. Disposal of the petition:The court directed that if the declared tax liability of Rs. 11,26,937/- was deposited within one month, the impugned show cause notice dated 31st December, 2020 would be quashed. Failure to deposit the amount within the stipulated time would result in the automatic revival of the notice, allowing the petitioner to file a reply. The court disposed of the petition with these directions, also disposing of any pending applications.In conclusion, the court found in favor of the petitioner, holding that the disqualification under the Sabka Vishwas Scheme was unjustified due to lack of evidence of any pending investigation. The court directed the department to accept the tax liability declaration and quash the show cause notice upon payment of the specified amount within one month.
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