2022 (11) TMI 697 - HC - Service Tax

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - It is Petitioner s case that no amount is payable and for that relies on Form SVLDRS-1 that Petitioner had filed - HELD THAT - Considering the Scheme, which is a beneficial piece of legislation, a party is entitled to file a consolidated declaration for all amounts which are, according to parties, payable to revenue. Just because the amounts payable would have come under the different categories does not mean the party should be made to pay something more than what would have been paid if a consolidated Application was filed. This scheme is for recovery of duty as also to recover tax and arrears of deficit amount. The scheme has been enacted with an object and purpose to minimize the tax disputes and to realise the arrears of tax by way of tax in exceptional manner. The scheme is a step towards the settlement or deciding disputed tax/liability. Therefore, the Respondent should consider the Application as filed so that litigation is minimized. In the circumstances, Respondents are directed to consider the declaration as filed by Petitioner as a valid declaration and dispose the same in accordance with law - petition disposed off.

Summary

Issues:
Impugning Form No.3 under SVLDRS, calculation of tax amount payable under SVLDRS, treatment of fourth show cause notice, demand raised based on reference number, entitlement to file a consolidated declaration under SVLDRS, interpretation of SVLDRS scheme, minimizing tax disputes, considering the Application as filed, peculiar facts of the case.

Analysis:
The petitioner challenged Form No.3 issued by the designated committee under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS), disputing the amount of Rs.38,41,637 imposed on them. The petitioner argued that no amount was payable, relying on Form SVLDRS-1 they had submitted. The core issue revolved around three show cause notices totaling Rs.1,15,39,463, which the respondents claimed fell under arrears as per SVLDRS, leading to a tax amount payable of Rs.65,18,031. A fourth show cause notice for Rs.76,83,273 was pending adjudication, with the respondents contending it should be treated as investigation, inquiry, or audit, resulting in an amount payable of Rs.38,41,637.

The petitioner faced a challenge as they had filed a single Application under SVLDRS for both categories, leading to a demand based on the reference number mentioned in the pending show cause notice. Despite the amounts falling under different categories, the court emphasized that a party could file a consolidated declaration for all payable amounts, ensuring fairness in payment. The SVLDRS scheme aimed to recover duty, tax, and arrears efficiently to minimize tax disputes and realize outstanding tax amounts in an exceptional manner, promoting settlement of disputed tax liabilities.

In light of the scheme's objective to reduce litigation and decide tax disputes, the court directed the respondents to consider the petitioner's filed declaration valid and process it according to the law. The judgment clarified that it was based on the unique circumstances of the case, ultimately disposing of the petition without any costs incurred.