2021 (1) TMI 104 - HC - Service Tax

Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 - rejection of declaration on the ground that as per report of the division vide letter dated 13.01.2020 no duty amount has been declared in return as payable but not paid - HELD THAT - The admitted facts of the present case are that the petitioner has filed return under the service tax law prior to 30th June 2019 and deposited the amount of duty along with the returns which was filed belatedly. Therefore clause (e) of Section 123 read with clause (c) of Section 121 of the SVLDR Scheme is not applicable on the facts of the present case. The circular relied by learned counsel for the petitioner has no application to the facts of the present case inasmuch as the circulars dated 25th September 2019 and 29th October 2019 relied by learned counsel for the petitioner is referable to subclause (iii) of clause (c) of Section 121 of the SVLDR Scheme. Perusal of the various provisions of the Scheme shows that the Scheme is a complete Code in itself. In substance it is a scheme for recovery of duty/indirect tax to unlock the frozen assets and to recover the tax arrears at a discounted amount. Thus Sabka Vishwas Scheme although a beneficial scheme for a declarant is statutory in nature which has been enacted with the object and purpose to minimise the litigation and to realise the arrears of tax by way of settlement at discounted amount in an expeditious manner. In other words the scheme is a step towards the settlement of outstanding disputed tax liability. Petition dismissed.

Issues:
1. Rejection of declarations under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 by the designated committee.
2. Interpretation of relevant clauses of the Finance Act and the SVLDR Scheme.
3. Application of clauses (c), (d), and (e) of Section 123 of the SVLDR Scheme.
4. Analysis of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and its provisions.
5. Determination of the eligibility and immunities under the SVLDR Scheme.
6. Evaluation of the nature and purpose of the SVLDR Scheme as a statutory scheme for recovery of duty/indirect tax.

Detailed Analysis:
The judgment concerns a writ petition filed to challenge the rejection of declarations under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 by the designated committee. The petitioner sought relief through a writ of certiorari and mandamus, highlighting that interest liability arose due to belated deposit of the amount. The rejection was based on the ground that no duty amount had been declared as payable but not paid, thus not falling under the category of arrears as per the impugned orders.

The court delved into the interpretation of key clauses of the Finance Act and the SVLDR Scheme to determine the eligibility and applicability of the petitioner's case. It analyzed clauses (c), (d), and (e) of Section 123 of the SVLDR Scheme, defining tax dues and the criteria for duty payment under indirect tax enactments. The court noted that the petitioner's case did not align with the clauses specified, as no pending enquiry or investigation existed against the declarant.

Further, the court scrutinized the provisions of the SVLDR Scheme, emphasizing that it is a comprehensive statutory scheme aimed at settling tax arrears through discounted payments to expedite dispute resolution. The court highlighted the procedural aspects outlined in the Scheme, including verification by the designated committee, issuance of statements, payment modalities, and immunities granted to declarants.

Ultimately, the court concluded that the petitioner's case did not merit relief, dismissing the writ petition. The judgment underscored the statutory nature of the SVLDR Scheme, designed to minimize litigation and facilitate the recovery of tax arrears efficiently. The court affirmed that the Scheme serves as a crucial mechanism for settling outstanding disputed tax liabilities, emphasizing its statutory and beneficial yet stringent framework.

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