2020 (8) TMI 81 - HC - Service Tax

Rejection of declaration under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - rejected on the sole ground that the demand was neither quantified nor communicated to the petitioner on or before 30th June, 2019 - HELD THAT - In the opinion of this Court, a liberal interpretation has to be given to the Scheme as its intent is to unload the baggage relating to legacy disputes under the Central Excise and Service Tax and to allow the businesses to make a fresh beginning - Since it is the petitioner s case that she had admitted her liability to pay service tax on 18th May, 2018 itself, this Court is of the view that the respondents should have given an opportunity of hearing to the petitioner before rejecting the declaration dated 29th December, 2019 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The impugned order dated 26th February, 2020 is set aside and the designated committee is directed to decide the petitioner s application after giving an opportunity of hearing to the petitioner - list the matter before the designated committee on 13th August, 2020 at 11.00 A.M.

Summary

Issues:
Challenge to rejection of declaration under Sabka Vishwas Scheme due to non-communication of demand before deadline, Violation of principles of natural justice by not providing a hearing before rejection.

Analysis:
1. The petitioner challenged the rejection of their declaration under the Sabka Vishwas Scheme, 2019, due to the non-communication of the demand before the specified deadline. The petitioner had admitted their liability in a statement on a prior date, and the demands were considered quantified as the amount was paid in installments subsequently.

2. The petitioner argued that as per relevant Circular provisions, relief under the Scheme is available for cases where duty demand is quantified and communicated to the party or admitted by them before the deadline. The impugned order was criticized for not following principles of natural justice as no notice or hearing was provided before rejection. The petitioner cited previous judgments to support their claim.

3. The Court acknowledged the intent of the Scheme to resolve legacy disputes and allow businesses to start anew. Considering the petitioner's admission of liability well before the deadline, the Court opined that a hearing should have been granted before rejection. Consequently, the impugned order was set aside, directing the designated committee to decide the application after providing a hearing to the petitioner.

4. The Court scheduled a date for the hearing before the designated committee and instructed a reasoned order to be passed within a specified timeline. All rights and contentions of the parties were left open, and the writ petition was disposed of with these directions. The order was to be uploaded online immediately and shared with the counsel via email for reference.