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2022 (11) TMI 1229 - HC - Service TaxSabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - amount of tax determined as payable by the Designated Committee - HELD THAT - In the facts of this case that in the de novo proceedings the SCN survives only for adjudication of tax dues of Rs. 1,11,35,419/-. We therefore, find merits in the submissions of the learned counsel for the Petitioner that for determining the amount payable by the Petitioner under the Scheme, the amount of tax dues to be taken into consideration would be for Rs. 1,11,35,419/- i.e., the amount confirmed by the original authority in the first round of litigation since the said assessment was accepted by the Department. The Petitioner cannot be prejudiced on account of the order of remand in the appeal filed by it, which resulted in the order-in-original being set aside for re-determination. The case of the Petitioner is also covered by the judgment in JYOTI PLASTIC WORKS PVT. LTD., JAI PLASTICS, N.D. PATEL VERSUS UNION OF INDIA 2020 (11) TMI 156 - BOMBAY HIGH COURT , which has been accepted by the Department. The stance taken by the Department in relying upon the SCN for determining the tax dues at Rs. 1,34,66,456/- is contrary to its stand before the CESTAT, wherein it accepted the determination of tax dues at Rs. 1,11,35,419/- - The inconsistency of the stance of the Department is further evident from the fact that if the appeal had been pending when the Scheme was announced the Petitioner s tax dues would have been admittedly, determined by the Respondent as per the order-in-original and not SCN. Therefore, the submissions of the Respondent cannot be accepted as the same will lead to an absurdity and make the scheme arbitrary. It would also be relevant to refer to the judgment of this Court in SEVENTH PLANE NETWORKS PRIVATE LIMITED VERSUS UNION OF INDIA ORS. 2020 (8) TMI 343 - DELHI HIGH COURT wherein the Court has held that a liberal interpretation has to be given to the scheme as intent is to unload the baggage relating to legacy disputes under the Central Excise and Service Tax and to allow the businesses to make a fresh beginning. In this view of the matter, since the Petitioner herein seeks to avail the benefits of the Scheme and is willing to pay the tax dues determined as per the demand raised in the order-in-original, he cannot be denied the said option and he cannot be put in a worse-off situation for having succeeded in his appeal - it is directed that the disputed tax dues in respect of the Petitioner would be the amount confirmed by the original authority in the first round of litigation of Rs. 1,11,35,419/-. The determination of tax by the Designated Committee in Form No. SVLDRS-3 is set aside. Petition disposed off.
Issues involved:
1. Interpretation of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. 2. Determination of tax dues under the Scheme based on the original order-in-original or the SCN. 3. Applicability of the Scheme in cases where the order-in-original has been set aside and remanded for fresh adjudication. 4. Consideration of tax dues in the context of pending litigation and appeal proceedings. Analysis: Issue 1: Interpretation of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 The petitioner sought to avail the benefits of the Scheme enacted under the Finance (No.2) Act, 2019. The Scheme aimed to resolve legacy disputes related to tax dues. The petitioner filed a declaration under the Scheme in the litigation category, specifying the duty amount determined in the order-in-original and the amount payable. However, the Designated Committee determined a higher amount payable based on the demand in the SCN, leading to a dispute regarding the correct computation of tax dues under the Scheme. Issue 2: Determination of tax dues under the Scheme The petitioner argued that the correct amount of tax dues should be based on the reduced demand determined in the order-in-original, which had attained finality as the Department did not appeal against it. The petitioner contended that the Designated Committee erred in relying on the SCN amount instead of the corrected demand in the order-in-original. Legal precedents were cited to support the petitioner's position that the tax dues should be based on the order-in-original amount, especially when no appeal was filed against the reduced demand. Issue 3: Applicability of the Scheme in remanded cases The respondent argued that since the order-in-original was set aside and remanded for fresh adjudication, a new determination of tax dues based on the original demand in the SCN was justified. However, the court held that in the de novo proceedings, the SCN survived only for the adjudication of tax dues confirmed by the original authority in the first round of litigation. The court emphasized that the petitioner should not be prejudiced by the remand order and should be allowed to pay the tax dues based on the original assessment accepted by the Department. Issue 4: Consideration of tax dues in pending litigation and appeal proceedings The court noted the inconsistency in the Department's stance, accepting the reduced demand in the order-in-original before the Tribunal but relying on the higher demand in the SCN for the Scheme. The court emphasized the need for a liberal interpretation of the Scheme to resolve legacy disputes and allow businesses to start afresh. Ultimately, the court directed the Designated Committee to determine the tax dues based on the amount confirmed by the original authority in the first round of litigation, setting aside the previous determination and ensuring the petitioner's right to pay the correct amount under the Scheme. This detailed analysis covers the interpretation of the Sabka Vishwas Scheme, the determination of tax dues, the applicability of the Scheme in remanded cases, and the consideration of tax dues in pending litigation and appeal proceedings as addressed in the judgment.
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