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2021 (9) TMI 935 - HC - Service TaxLevy of tax, claimed under Form SVLDRS-1 - service tax dues, was paid late - It is contended that the respondent No. 4, without considering the provision of Scheme of 2019 and without giving any opportunity of hearing to the petitioner passed the order in a mechanical manner by which the Form SVLDRS-1 submitted by the petitioner was summarily rejected - HELD THAT - According to the Scheme, once the assessee avails the Scheme and files the return by declaration, the verification of declaration by the designated committee was prescribed under Section 126 of the SVLDRS Scheme and the issue of statement by the designated committee is covered under Section 127 of the SVLDRS Scheme - As per Section 127 of the SVLDRS Scheme, when the declaration made by the petitioner was rejected, meaning thereby he would be liable to pay further interest and penalty on late payment and return. However, to levy any such liability under Section 127 of the SVLDRS Scheme, under Section 127(3), it mandates that after the issue of estimate under Section 127(2), the designated committee shall give opportunity of being heard to the declarant, if he so desires, before issuing the statement indicating the amount payable by the declarant. The order which is on record whereby the declaration of the petitioner was rejected, meaning thereby he would be liable to pay the additional amount, which would be a levy imposed. In order to impose such levy, the designated committee was duty bound to hear the petitioner by giving him an opportunity of hearing. Considering the benevolent scheme which has been set into motion by the respondents, the petitioner was required to be heard even otherwise under the statutory mandate The order whereby the Form SVLDRS-1 was rejected by the designated committee which is embodied in the remarks column is set-aside. The cases are remanded back to the designated committee with a direction to give an opportunity of hearing to the petitioner by adhering to the rules of natural justice - Petition allowed by way of remand.
Issues:
Challenge to tax levy under SVLDRS Scheme 2019, rejection of Form SVLDRS-1, duty to pay penalty and interest, opportunity of hearing not provided, interpretation of SVLDRS Scheme provisions. Analysis: The writ petition challenges the levy of tax claimed under Form SVLDRS-1, filed under the Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019. The petitioner contends that despite filing service tax returns late, they did not pay interest or penalty, applying for waiver under the SVLDRS Scheme. The rejection of the Form by the respondent without considering the Scheme's provisions or granting a hearing is disputed. The petitioner, an assessee under the Finance Act 1994, availed the SVLDRS Scheme to resolve disputes related to service tax payments. The Scheme aimed to provide relief to eligible persons, excluding specific categories, and end existing disputes. The provisions of Sections 125 and 127 of the SVLDRS Scheme outline eligibility criteria for declarations and the process for verification and estimation of payable amounts. The rejection of the petitioner's Form SVLDRS-1 without a hearing violated the statutory requirement under Section 127(3) of the SVLDRS Scheme, mandating an opportunity for the declarant to be heard before determining payable amounts. The failure to provide a hearing before imposing additional liabilities contradicted the benevolent nature of the Scheme and the principles of natural justice. The judgment sets aside the rejection of the Form SVLDRS-1 and remands the case to the designated committee with directions to provide the petitioner with a hearing in accordance with the rules of natural justice. The committee is instructed to reconsider the case after hearing the petitioner and pass orders in compliance with the law. In conclusion, the writ petition is allowed to the extent indicated, emphasizing the importance of providing an opportunity of hearing to the petitioner in matters concerning the SVLDRS Scheme 2019 to ensure procedural fairness and adherence to statutory requirements.
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