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2020 (11) TMI 156 - HC - Central ExciseAmount of tax dues - Substitution of estimated amount payable as mentioned in forms SVLDRS-2 and SVLDRS-3 with the tax dues less tax relief amounts - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - whether the petitioners could be prejudiced or put in a worse off condition firstly by filing appeal before the CESTAT and secondly by filing declarations under the scheme? HELD THAT - We may refer to the maxim reformatio in peius. It is a latin phrase meaning a change towards the worse i.e., a change for the worse. As a legal expression it means that a lower court judgment is amended by a higher court into a worse one for those appealing it. In many jurisdictions, this practice is forbidden ensuring that an appellant cannot be placed in a worse position as a result of filing an appeal. When the above phrase is prefixed by the words no or prohibition , which would render the maxim as no reformatio in peius or prohibition of reformatio in peius, it would denote a principle of procedure as per which using a remedy available in law should not aggravate the situation of the person who avails the remedy. In other words, a person should not be placed in a worse position as a result of filing an appeal. No reformatio in peius or prohibition of reformatio in peius is a part of fair procedure and thus by extension can also be construed as part of natural justice. It is not only a procedural guarantee but is also a principle of equity. The initial show cause-cum-demand notice dated 17.01.1992 cannot be said to be in existence after the order in original was passed on 29.03.2006 which order has been accepted by the department. Quantification of dues had been done which was accepted by the department - Since the figures i.e., demand amounts in the order in original dated 29.03.2006 have been accepted by the respondents, it is those figures which would be material and not the figures mentioned in the show cause-cum-demand notice. Petitioners cannot be put in a worse off condition or the situation faced by them cannot be aggravated because they had availed the remedy of appeal or had sought relief under the scheme which is a beneficial one. Having regard to the objective of the scheme, in a case of this nature, a reasonable and pragmatic approach has to be adopted so that a declarant can avail the benefits of the scheme; a declarant who seeks benefit under the scheme cannot be put in a worse off condition than he was before making declaration under the scheme. That would defeat the very purpose of the scheme. This Court had already clarified that payments made by the petitioners following issuance of forms SVLDRS-2 and SVLDRS-3 would be subject to outcome of the writ petitions and if the petitioners succeed, they would be entitled to the refund of excess payment made without having to institute separate proceedings - the tax dues in respect of each of the three petitioners shall be treated as ₹ 6,15,017.00, ₹ 10,12,375.00 and ₹ 2,66,193.00 respectively, ₹ 18,93,585.00 collectively, and payments made by the petitioners in excess shall be refunded to them within a period of eight weeks from the date of receipt of a copy of this judgment. Petition allowed.
Issues Involved:
1. Determination of the amount of tax dues under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. 2. Whether the tax dues should be based on the original show cause-cum-demand notice or the adjudicated amount accepted by the department. 3. Application of the principle of "no reformatio in peius" in the context of the scheme. 4. Entitlement to refund of excess payment made under the scheme. Detailed Analysis: 1. Determination of the Amount of Tax Dues: The core issue in the petitions was to determine the amount of tax dues under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The petitioners argued that the tax dues should be based on the amounts determined in the adjudication process and accepted by the department, while the respondents contended that the tax dues should be based on the original amounts mentioned in the show cause-cum-demand notice. 2. Basis for Tax Dues: The petitioners were issued a show cause-cum-demand notice on 17.01.1992 with a total demand of ?94,90,264.00. Upon adjudication, the Commissioner of Central Excise reduced the demand to ?18,93,585.00 through an order dated 29.03.2006, which was accepted by the department. However, the petitioners appealed to the CESTAT, which remanded the matter back for a fresh decision on merits apart from quantification. The adjudication was pending as of 30.06.2019, the cut-off date for the scheme. The respondents argued that since the CESTAT set aside the order in original, the original show cause-cum-demand notice amount should be considered as the tax dues. The court, however, disagreed, emphasizing that the amounts determined in the adjudication process and accepted by the department should be considered, not the original demand. 3. Principle of "No Reformatio in Peius": The court applied the principle of "no reformatio in peius," which means that an appellant cannot be placed in a worse position as a result of filing an appeal. The court held that the petitioners could not be prejudiced or put in a worse condition due to filing an appeal or declarations under the scheme. The court cited precedents emphasizing that using a legal remedy should not worsen the appellant's situation. 4. Refund of Excess Payment: The court clarified that the payments made by the petitioners following the issuance of forms SVLDRS-2 and SVLDRS-3 would be subject to the outcome of the writ petitions. Since the court determined that the tax dues should be based on the reduced amounts accepted by the department, the petitioners were entitled to a refund of the excess payments made. The court directed the respondents to refund the excess amounts within eight weeks. Conclusion: The court concluded that the tax dues for the petitioners under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, should be based on the adjudicated amounts accepted by the department, not the original amounts in the show cause-cum-demand notice. The principle of "no reformatio in peius" was upheld, ensuring that the petitioners were not placed in a worse position due to their appeals or declarations under the scheme. The court ordered the refund of excess payments made by the petitioners. All writ petitions were allowed without any order as to costs.
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