2023 (1) TMI 1143 - HC - Service Tax

Interpretation of statute - meaning of expression tax dues occurring in Section 124 (2) of the FA - Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 - case of the Petitioners throughout has been that for the purpose of Section 124 (2) FA, which applies to the SVLDR Scheme, it had already paid in excess of the amount shown as payable - HELD THAT - When the legislature usages two different expressions viz. 'duty' and tax dues , it is obviously done with a purpose. If the intention was that these expressions are interchangeable then the wording of Section 124(1) (a) FA would read differently. The tax dues in the present case referred to not just the duty amount, but duty plus interest or to put differently the total amount of duty payable which would include the main duty component and the interest component. This explains why under Section 123(a)(i) FA while defining the expression tax dues , the legislature has referred to the total amount of duty which has been disputed . The Court is unable to agree the stand taken by the Department in the present case that notwithstanding the Petitioners having deposited already Rs.56,37,449/- as tax dues as defined under Section 123(a) of the FA i.e., duty plus interest, it has still to pay a further sum of Rs.13,05,125/- for its application under the SVLDR Scheme to be considered - the impugned intimation dated 27 th February, 2020 issued by the Joint Commissioner, GST Central Excise Commissionerate, Bhubaneswar (Annexure-11) is hereby set aside and direction is issued to the Department to now take up for consideration the Petitioners application under the SVLDR Scheme without insisting on any further amount to be deposited by the Petitioners. Petition disposed off.

Summary

Issues: Interpretation of 'tax dues' under the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019.

The judgment by the Orissa High Court delves into the challenge posed by a communication requiring the petitioners to pay a sum under the SVLDR Scheme. The petitioners had already deposited an amount before opting for the scheme, disputing the interpretation of 'tax dues' under Section 124(2) of the Finance Act. The court analyzed the definition of 'tax dues' under Section 123(1) of the FA, emphasizing the inclusion of both duty and interest components in the total amount. The court disagreed with the department's stance that the petitioners must pay an additional sum, as the deposited amount already covered the 'tax dues' as defined in the Act. Consequently, the court set aside the communication and directed the department to consider the petitioners' application under the SVLDR Scheme without further deposit requirements, ensuring a hearing within three months.

The judgment highlights the importance of distinguishing between 'duty' and 'tax dues' within the legislative framework, emphasizing that these terms are not interchangeable. It elucidates that 'tax dues' encompass not only the duty amount but also the interest component, as evident from the statutory provisions. The court's analysis underscores that the total amount of duty under dispute includes both the principal duty and the interest, leading to the conclusion that the petitioners had already fulfilled their 'tax dues' obligation by depositing the requisite amount. By setting aside the communication and instructing the department to proceed with the petitioners' SVLDR Scheme application without additional payments, the court upholds the statutory interpretation to ensure fairness and adherence to legal provisions.