2021 (9) TMI 425 - HC - Service Tax

Scope of SVLDRS scheme - Arrears or litigation category - Determination of amount payable afresh under Section 124(1)(a) of the Finance (No.2) Act, 2019 under SABKA VISHWAS (Legacy Dispute Resolution) Scheme 2019 as pending litigation category after verification of the records - recovery of arrears - violation of principles of natural justice - HELD THAT - It is no doubt clear that the scheme was in force. At the time when the Scheme was in force, the petitioner made application to avail the benefit as per Sections 124 125, as referred to above, wherein it has been mentioned that, who are all the eligible persons who can claim the benefit or to get a declaration for availing the benefit of the scheme - in the case in hand, admittedly, the petitioner filed an appeal on 20.06.2019 ie., 10 days prior to the cut off date before the CESTAT, therefore, on 30.06.2019, in the eye of law, there has been a litigation by way of appeal which has been filed and pending before the appellate forum. Whether the appeal filed on 20.06.2019 would be subsequently numbered or not is not the criteria, as the same has not been mentioned either under Section 124 or 125. Moreover, when there is a specific exclusion provided under Section 125, all other categories are eligible to seek such declaration in view of the language used in Section 125(1) ie., all persons shall be eligible to make a declaration under this scheme except the following, namely; . The petitioner, in the considered opinion of this Court, is eligible to claim the benefit under the scheme by treating him under the category of litigation . Therefore, what has been recorded in the order dated 22.01.2020 shall prevail and the subsequent order dated 27.01.2020, which is impugned herein cannot be sustained - Petition disposed off.

Summary

Issues:
1. Interpretation of Sections 124 and 125 of the Finance (No.2) Act, 2019 under SABKA VISHWAS (Legacy Dispute Resolution) Scheme 2019.
2. Eligibility criteria for declaring under the "litigation" category versus the "arrears" category.
3. Correct determination of the amount payable by the petitioner under the scheme.

Analysis:

1. The petitioner sought a Writ of Certiorarified Mandamus challenging the respondent's declaration of an amount payable under the SABKA VISHWAS Scheme. The respondent initially determined the amount as &8377; 7,32,236/- under the "litigation" category. However, a subsequent declaration categorized the petitioner under the "arrears" category, increasing the amount to &8377; 13,24,448/-. The petitioner contended that filing an appeal before the CESTAT prior to 30.06.2019 made them eligible under the "litigation" category, as per Sections 124 and 125 of the scheme.

2. The petitioner argued that the appeal filed before the CESTAT on 20.06.2019, before the cut-off date, qualified them to be considered under the "litigation" category. The respondent, on the other hand, contended that unless an appeal is numbered and pending adjudication, the petitioner should be categorized under the "arrears" category. The Court analyzed the provisions of Sections 124 and 125, emphasizing that the pendency of the appeal by the cut-off date made the petitioner eligible for the scheme, irrespective of the appeal's numbering status.

3. The Court held that the respondent's re-categorization of the petitioner under the "arrears" category was unjustified and contrary to the scheme's provisions. The Court directed the respondent to treat the petitioner under the "litigation" category, as per the initial order, and confirmed the amount of &8377; 7,32,236/- as payable. The Court further stated that since the petitioner had already paid the said amount, no further payment was required. The respondent was instructed to comply with the order within four weeks.

In conclusion, the Court quashed the impugned order, directing the respondent to adhere to the initial determination under the "litigation" category. The writ petition was disposed of with no costs, and the connected miscellaneous petition was closed.