2023 (2) TMI 485 - HC - Service Tax

Seeking refund the service tax deposited by the petitioner under SVLDRS-2019 - dispute inter se between the petitioner and her husband as to the real ownership of M/s. Creative Media and the liability of payment of service tax - HELD THAT - SVLDRS-2019 Scheme was voluntarily scheme introduced by Government of India and there was no compulsion of any person or party to opt for Scheme. Section 129 and 130 of the SVLDRS-2019 enacted in Parliament vide Chapter V of Finance Act (No. II) Act, 2019 clearly provides that Scheme shall be conclusive as to the matter and time period stated therein. From reading of Section 130, it is clear that any amount paid under the Scheme shall not be refunded under any circumstances. Once, the petitioner had opted for the Scheme and paid the amount with full eyes open she cannot after a lapse of three years come up and claim for refund of the amount paid by her. From reading of the material on record as well as from her argument, it appears that there is some matrimonial dispute going on between the petitioner and her husband, Ashok Jha - The plea taken by petitioner, Pratibha Jha cannot be accepted by this Court at this stage seeking refund of the service tax amount deposited by her under the Scheme, due to the fact that the documents which have been brought on record such as registration before the Service Tax Department of the year 2013, her statement before the adjudicating authorities as well as the orders passed on her application under the Scheme of 2019 clearly demonstrates that she is the proprietor of M/s. Creative Media. The entire emphasis on part of petitioner is on the fact that her husband played mischief by portraying her as the proprietor of M/s. Creative Media not only before the taxing authorities but also before the Bank, and thus, any recovery to be made by the Department should be made from Ashok Jha, her husband. This Court finds that it is a dispute inter se between the petitioner and her husband as to the real ownership of M/s. Creative Media and the liability of payment of service tax. From the documents which have been placed before the Court, it is clear that petitioner herself had got registered with the Tax Department in the year 2013 as the proprietor of M/s. Creative Media. In her tax return for the Assessment Year 2014-15, the business income has been shown from Creative Media. Moreover, she has opted for SVLDRS-2019 Scheme and had deposited the concessional tax amount getting a huge relief for the balance amount - In case, petitioner wants refund of the amount deposited by her as service tax, she can initiate appropriate legal proceedings against her husband, Ashok Jha for the recovery of the amount deposited by her during the compounding scheme. The Service Tax Department is only concerned with service tax which is due to be paid by the firm, Creative Media for the business done during the relevant period. In case of any dispute as to the proprietorship of the firm, it is the person who claims the dispute should approach the appropriate legal forum for redressal of her grievance against the person whom she claims to be the real person behind the agency. There are no case for interference is made out exercising extraordinary jurisdiction under Article 226 of Constitution - petition dismissed.

Summary

Issues:
1. Refund of service tax paid under SVLDRS-2019 Scheme.

Analysis:
1. The petitioner sought a mandamus for a refund of the amount deposited following orders from 2015 and 2019. She claimed that her husband, not her, was the proprietor of the firm Creative Media. The Central Excise Department initiated proceedings against her, compelling her to deposit the amount to avoid penalties. The petitioner argued that the orders holding her liable were unjust and instigated by her husband.

2. The Department contended that Creative Media was registered in the petitioner's name as a proprietorship concern. Investigations revealed non-payment of service tax for the period 2009-2014. After a show-cause notice in 2014, the petitioner's liability was confirmed in 2015 and 2019. The petitioner then voluntarily applied for the SVLDRS-2019 Scheme in 2019, settling for a reduced payment of Rs.14,76,806 against the liability of Rs.33,18,514, obtaining a tax relief of Rs.18,41,708.

3. The respondent argued that the SVLDRS-2019 settlement had attained finality in 2020, making the present petition for refund not maintainable. The Scheme's provisions under Sections 129 and 130 of the Finance Act, 2019, state that the Scheme's decisions are conclusive, and no refund is permissible under any circumstances once opted for.

4. The Court found that the petitioner's claim for a refund under the SVLDRS-2019 Scheme was not valid. The petitioner's registration as the proprietor of Creative Media, her tax returns, and her voluntary participation in the Scheme indicated her liability. The Court emphasized that any dispute regarding the firm's ownership should be settled through appropriate legal proceedings against the husband, who was not a party in the present petition.

5. The Court concluded that the petitioner's arguments regarding her husband's actions and the firm's ownership did not warrant a refund under the Scheme. The petitioner was advised to pursue legal action against her husband for recovery. The Court dismissed the writ petition, finding no grounds for interference under Article 226 of the Constitution.