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2024 (2) TMI 1218 - HC - Service TaxRejection of the application filed by the petitioner, claiming the benefit of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - application rejected, essentially, on the ground that as on the cut-off date, that is, 30.06.2019, the investigation was pending and the amount of duty involved was not quantified - whether the service tax payable by the petitioner had been quantified in terms of Section 121(r) of the Finance Act (No. 2), 2019 prior to 30.06.2019? - HELD THAT - This Court in HANSUTTAM FINANCE LIMITED VERSUS PRINCIPAL COMMISSIONER OF CENTRAL EXCISE, GOODS AND SERVICE TAX, DELHI SOUTH COMMISSIONERATE ORS. 2023 (5) TMI 812 - DELHI HIGH COURT had analysed the object of the Scheme and held The impugned order rejecting the petitioner s declaration on the ground that investigation has not been concluded and hence the demand has not been estimated or concluded on or before the stipulated date is unsustainable. The Scheme does not exclude taxpayers in respect of whom investigations have not been concluded; it expressly includes taxpayers in respect of whom investigation, enquiry or audit is pending. This court held that in cases where an inquiry, audit or investigation is pending, the quantification of the tax dues can be ascertained from the written communication. It is not necessary that the written communication, in which the amount of duty payable is quantified must emanate from the concerned tax department. The said amount of tax dues can be ascertained from the written communication emanating from the taxpayer as well subject to the same being part of the record. The unilateral communication, which is disputed and is not accepted by the department, however, cannot be considered as quantification of tax due. On 15.03.2019, the petitioner had provided the computation sheet which quantified the tax dues payable by the petitioner for the concerned period. In terms of the law laid down by this Court, the said communication qualifies as written communication quantifying the tax dues, albeit emanating from the petitioner. There is no material dispute as to this quantification. The Revenue has, in fact, accepted the calculation of the tax dues furnished by the petitioner. Thus, for the purposes of Section 123(c) read with Section 121(r) of the Act, the tax dues stand quantified in terms of a written communication of the amount of duty payable under the indirect tax enactment; as an admission of liability in a written communication for the purpose of Section 123(c) read with Section 121(r) of the Scheme in the Finance Act (No. 2), 2019. This is not a case where the department is not in agreement with the quantification as provided by the petitioner - the demand made in the Show Cause Notice is based on the documents provided by the petitioner, which includes the revised calculations. The said calculations have not been questioned. The legislative intent underlying the enactment of the Scheme was to include all taxpayers for offloading the baggage of disputes. All taxpayers, except those which were specifically excluded, were entitled to avail the benefit of the said Scheme. The Scheme also covered cases where no disputes were pending and enabled the taxpayers to voluntarily pay taxes and avail amnesty under the Scheme - it is clear that the tax dues had been quantified as required under Section 121(r) of the Finance Act (No. 2), 2019. The Division Bench of Bombay High Court in the case of THOUGHT BLURB VERSUS UNION OF INDIA AND ORS. 2020 (10) TMI 1135 - BOMBAY HIGH COURT had examined the legislative intent of the Scheme and had held that a summary rejection of an application without affording an opportunity of being heard would fall foul of the principles of natural justice. The respondents are directed to consider the declaration of the petitioner in terms of the Scheme as a valid declaration under the category of investigation, enquiry and audit and grant the consequential reliefs to the petitioner. While doing so, the respondents shall provide an opportunity of hearing to the petitioner and thereafter, pass a speaking order with due communication to the petitioner - Petition allowed.
Issues Involved:
1. Rejection of application under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. 2. Quantification of tax dues before the cut-off date. 3. Adherence to principles of natural justice. Summary: 1. Rejection of Application under Sabka Vishwas Scheme: The petitioner filed a writ petition challenging the rejection of their application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, for the period April 2014 to June 2017. The rejection was based on the grounds that the investigation was pending, and the amount of duty involved was not quantified as of the cut-off date, 30.06.2019. 2. Quantification of Tax Dues Before the Cut-off Date: The petitioner argued that the tax dues were quantified in the notice under Section 87 of the Finance Act, 1994, issued on 06.03.2019, which directed the petitioner's bank to deposit the amount due. The petitioner contended that this notice indicated the department's awareness of the amount payable, thus meeting the requirement of quantification under the Scheme. The petitioner had also submitted a revised computation sheet on 15.03.2019, which formed the basis of the Show Cause Notice issued on 30.06.2020. The court held that the quantification of tax dues could be ascertained from any written communication, including those emanating from the taxpayer, provided it was part of the record and not disputed by the department. The court noted that the department had accepted the petitioner's calculations and issued a recovery notice under Section 87 of the Act, indicating that the tax dues were quantified. 3. Adherence to Principles of Natural Justice: The court emphasized the need for adherence to the principles of natural justice, noting that the rejection of the petitioner's application without affording an opportunity for a personal hearing violated these principles. The court referenced previous judgments, including those of the Bombay High Court, which held that summary rejection of applications under the Scheme without a hearing was contrary to natural justice and the legislative intent of the Scheme. Conclusion: The court directed the respondents to consider the petitioner's declaration as valid under the category of "investigation, enquiry, and audit"¯ and to grant consequential reliefs. The respondents were instructed to provide an opportunity for a hearing and to pass a speaking order with due communication to the petitioner. The petition was allowed in these terms.
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