The Hon’ble Bombay High Court in the case of BRAMHANAND KANOJIA VERSUS THE UNION OF INDIA, THE COMMISSIONER OF CGST AND CENTRAL EXCISE, THANE, THE JOINT COMMISSIONER OF CGST AND CENTRAL EXCISE, THANE, THE DEPUTY DIRECTOR DGGI, ZONAL UNIT, MUMBAI, THE SENIOR INTELLIGENCE OFFICER, DGGI, ZONAL UNIT, MUMBAI, THE DESIGNATED COMMITTEE MUMBAI. - 2024 (12) TMI 679 - BOMBAY HIGH COURT disposed the writ petition where pursuant to summons, a statement was recorded on wherein the Assessee admitted his liability and agreed to pay outstanding liability, along with interest, duty demand was quantified much before June 30, 2019. Hence, Assessee could not be disqualified under Section 125(1)(e) of Sabka Vishwas Scheme, 2019 (“the SVLDR Scheme”) and application for settlement of dispute under the SVLDR Scheme could not be rejected.
Facts:
Mr. Bramhanand Kanojia (“the Petitioner”) was carrying on business as a sole proprietor in the name of M/s. Evershine Cleaners and was engaged in providing dry cleaning services.
On June 28, 2018, summons under Section 83 of the Finance Act, 1994 were issued to the Petitioner and a statement was recorded wherein the Petitioner admitted that the approximate service tax liability for the financial years 2014-2015 to 2017-2018 would be around Rs. 21.70 lakhs out of which the Petitioner has been paid Rs. 13 lakhs. On April 15, 2019, the Petitioner informed the Respondents that he has paid total service tax liability of Rs. 23.73 lakhs.
Meanwhile, the SVLDR Scheme was introduced and the Petitioner made an application under the category "investigation, enquiry or audit". In the said Form, the duty amount was mentioned at Rs. 28,72,603/- and the pre-deposit amount was mentioned at Rs. 23,82,188/-. The said application came to be rejected on November 8, 2019 under Section 125(1)(3) of the SVLDR Scheme.
On December 30, 2019, the Petitioner once again made an identical application referred to above, which came to be rejected on January 23, 2020, on the ground that the amount was not quantified on or before June 30, 2019.
Hence, the Petitioner filed a writ petition challenging the rejection of his declaration on the ground of ineligibility.
Issue:
Whether Pre-June, 2019 quantification validates SVLDR Scheme Application?
Held:
The Hon’ble Bombay High Court in BRAMHANAND KANOJIA VERSUS THE UNION OF INDIA, THE COMMISSIONER OF CGST AND CENTRAL EXCISE, THANE, THE JOINT COMMISSIONER OF CGST AND CENTRAL EXCISE, THANE, THE DEPUTY DIRECTOR DGGI, ZONAL UNIT, MUMBAI, THE SENIOR INTELLIGENCE OFFICER, DGGI, ZONAL UNIT, MUMBAI, THE DESIGNATED COMMITTEE MUMBAI. - 2024 (12) TMI 679 - BOMBAY HIGH COURT held as under:
- Observed that, Section 125(1) of SVLDR Scheme provides that all persons shall be eligible to make a declaration under the SVLDR Scheme, except those mentioned in clauses (a) to (h). The Respondents have invoked Section 125(1)(e) for disqualifying the Petitioner on the ground that in case of an enquiry or investigation or audit if the amount of duty is not quantified on or before June 30, 2019 then a person is not eligible to make a declaration under this Scheme. In the instant case, on a query being asked by the investigation officer during the course of statement as to how he would be paying the outstanding liability, he stated that he will pay along with interest. This shows that authority also admitted the quantification much before June 30, 2019.
- Opined that, Section 125(1)(e) disqualifies if there is no quantification on or before June 30, 2019 and not where there is difference in figure in the quantification. In the instant case, as against the Show Cause Notice demand of Rs. 28,72,603/-, the Petitioner quantified Rs.23.73 lakhs prior to June 30, 2019. Therefore, the Petitioner cannot be said to be disqualified under Section 125(1)(e) of SVLDR Scheme.
- Observed that, under Section 126 of SVLDR Scheme, the Designated Authority has the power to verify the figures mentioned in the declaration and give a counter-offer to the declarant of the correct amount. However, the Petitioner's application was thrown out at the threshold itself and, therefore, this stage did not arise. The Scheme has come to an end and the Petitioner has stated that he is willing to substitute the figure of Rs.28,72,603/- in place of Rs. 23,82,188/- and is willing to pay interest on the balance. In view thereof, the Petitioner's declaration was rejected wrongly by invoking the provisions of Section 125(1)(e) of the SVLDR Scheme. However, since the Petitioner is eligible and has now offered to pay the difference along with interest and in the light of subsequent fact that the Scheme has come to an end.
- Noted that, on April 15, 2019, the Petitioner informed that he has paid total service tax of Rs. 23,82,188/- for the financial years 2013-2014 to 2017-2018. The Petitioner also gave details of service tax payments. Therefore, the quantification of duty was made prior to June 30, 2019 and merely because a show cause notice is issued after June 30, 2019, it cannot be said that the quantification was not made prior to June 30, 2019. The SVLDRS Scheme is silent as to who should quantify.
- Relied on, SABAREESH PALLIKERE, PROPRIETOR OF M/S. FINBROS MARKETING VERSUS JURISDICTIONAL DESIGNATED COMMITTEE, THANE COMMISSIONERATE, DIVISION IV, RANGE-II & ORS. - 2021 (2) TMI 515 - BOMBAY HIGH COURT & EKA ACADEMY PRIVATE LIMITED VERSUS UNION OF INDIA, THE CHAIRMAN CENTRAL BOARD OF INDIRECT TAXES AND CUSTOMS, DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, NEW DELHI, THE COMMISSIONER CENTRAL GST COMMISSIONERATE, RAIGAD, THE JOINT COMMISSIONER SVLDRS CELL, CENTRAL GST COMMISSIONERATE, RAIGAD, THE ASSISTANT COMMISSIONER, CENTRAL GST COMMISSIONERATE, RAIGAD. - 2024 (8) TMI 613 - BOMBAY HIGH COURT.
- Held that, rejection of SVLDR Scheme were quashed and set aside and the Respondents were directed to accept the same. In order to re-calculate the amount payable under the Scheme by taking the figure of Rs. 28,72,603/-as duty quantified on or before June 30, 2019 (as reduced any pre-deposit or payment made) and intimate the same to the Petitioner to make the payment along with interest at the rate of 6% per annum from January 01, 2020 till date of such intimation.
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