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2022 (11) TMI 1008 - HC - Service TaxRejection of declarations of the petitioners under the Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 - rejection only on the ground that the appeal pending before the Apex Court is not pursuant to the show cause notice issued by the Department - applicability of Circular No. 1073/06/2019.CX dated 29th October 2019. It is clarified that the Retailer Association of India has represented that the department has initiated proceedings against lessors for non-payment of service tax on rent over immovable property rented by the members. The Apex Court has allowed the lessees to file a Civil Appeal challenging the applicability of service tax subject to the condition that they deposit appropriate pre-deposit as well as the remaining dues if the case of the petitioners is decided against them eventually. HELD THAT - The said circular is clarificatory in nature. In view of the circular, the petitioners are allowed to file declaration under the Scheme and avail benefits subject to complying with the remaining conditions of the Scheme. The said circular is binding upon the respondent. In the light of above, the impugned orders rejecting the declaration filed by the petitioners are set aside. Petition disposed off.
Issues:
1. Rejection of declarations under the Sabka Vishwas Scheme 2019 based on pending appeal before the Apex Court not pursuant to show cause notice. 2. Eligibility of petitioners to apply under the Scheme as clarified in Circular No. 1073/06/2019.CX. 3. Interpretation of the circular's applicability to the case of Retailers Association of India. 4. Setting aside of orders rejecting petitioners' declarations under the Scheme. 5. Requirement for petitioners to comply with all conditions under the Scheme for availing benefits. Analysis: The High Court of Bombay considered writ petitions challenging the rejection of declarations under the Sabka Vishwas Scheme 2019. The petitioners, members of the Retailers Association of India, had filed appeals before the Apex Court regarding the validity of service tax on "Renting of Immovable Property Services." The Apex Court had directed the petitioners to deposit 50% of the arrears towards the tax and file an undertaking. The rejection of declarations was based on the ground that the appeal pending before the Apex Court was not pursuant to the show cause notice issued by the Department. The Senior Advocate for the respondent argued that the petitioners were not served with a show-cause notice and that they were service recipients, not the service provider, making only the service provider liable for the tax. The Court examined Circular No. 1073/06/2019.CX, which clarified that certain members, including the Retailers Association of India, were allowed to file declarations under the Scheme and avail benefits, subject to complying with the Scheme's conditions. The Court noted that the circular allowed the petitioners to file declarations under the Scheme and avail benefits, emphasizing that the circular was binding upon the respondent. Consequently, the impugned orders rejecting the petitioners' declarations were set aside, with a directive for the respondent to reconsider the declarations without basing rejection on the previous grounds. The Court emphasized that the petitioners must comply with all conditions under the Scheme to benefit from it. Ultimately, the writ petitions were disposed of without costs, ensuring the petitioners' eligibility to apply under the Sabka Vishwas Scheme 2019 as clarified in the circular.
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