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2024 (3) TMI 925 - HC - Service TaxRecovery of arrears of tax in terms of Section 124(1)(c) of the Sabka Vishwas (Legacy Dispute Resolution Scheme Rules, 2019 in the Finance Act, 2019 - jurisdiction under Section 74 of the Finance Act, 1994 was invoked to rectify the mistake - HELD THAT - The power to rectify an order is confined only to remove the error apparent on the fact of record. Therefore, a rectification proceeding under Section 74 of the Finance Act, 1994 cannot be considered to be an appellate proceeding before the Appellate Authority under Section 86 of the Finance Act, 1994 although, proceeding initiated proceeding under Section 74 of the Finance Act, 1994 may also result in reversal of the decision sought to be rectified. There is no merits in the submissions of the petitioner that the case of the petitioner has to be settled in terms of Section 124(1)(a) of Chapter V of Finance Act, 2019 contrary under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. Considering the fact that the petitioner was given a temporary relief by this Court while passing order dated 17.03.2020, the petitioner cannot be denied the benefit of Sabka Vishwas - (Legacy Dispute Resolution) Scheme, 2019 if the petitioner has complied with the said order by depositing Rs. 1,66,83,286/- within a period of two weeks as was ordered. The petitioner shall pay an amount of Rs. 33,36,656/- within a period of 30 days from the date of receipt of a copy of this order, provided the petitioner has paid a sum of Rs. 1,66,83,286/- as was ordered on 17.03.2020 - petitioner shall also pay the interest at 12% p.a. on the delayed payment of (Rs. 1,66,83,286/- and Rs. 33,36,656/-) Rs. 2,00,19,942/- from the date of expiry of 30 days from the receipt of Form SVLDRS-3 - In case, the petitioner had failed to pay the amount of Rs. 1,66,83,286/- as ordered on 17.03.2020 and fails to pay the amounts as ordered now, the benefit of Sabka Vishwas - (Legacy Dispute Resolution) Scheme, 2019 shall not be extended to the petitioner. Petition disposed off.
Issues Involved:
1. Validity of the demand under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. 2. Classification of the petitioner's case under Section 124(1)(a)(ii) vs. Section 124(1)(c)(ii) of the Finance Act, 2019. 3. Consideration of rectification application under Section 74 of the Finance Act, 1994 as an appeal. Summary: 1. Validity of the Demand under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019: The petitioner challenged the impugned communications dated 12.02.2020 in Form SVLDRS-3, where the Designated Authority asked the petitioner to pay amounts towards arrears of tax as per Section 124(1)(c) of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. 2. Classification of the Petitioner's Case under Section 124(1)(a)(ii) vs. Section 124(1)(c)(ii) of the Finance Act, 2019: The petitioner argued that their case should be considered under Section 124(1)(a)(ii) of the Finance Act, 2019, which pertains to pending appeals as of June 30, 2019, and not under the arrears category. The petitioner claimed they were required to pay only 50% of the tax due under Section 124(1)(a)(ii) rather than 60% under Section 124(1)(c)(ii). 3. Consideration of Rectification Application under Section 74 of the Finance Act, 1994 as an Appeal: The petitioner contended that the rectification application filed under Section 74 of the Finance Act, 1994 should be treated on par with an appeal under Section 86 of the said Act. The court, however, clarified that the initiation of rectification proceedings under Section 74 cannot be equated with an appeal under Section 86. The scope of an appeal is broader than that of a rectification application, which is limited to correcting errors apparent on the face of the record. Court's Findings: - The court concluded that the petitioner's case should be considered under the "amount in arrears"¯ category as defined in Section 121(c)(i) of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, since no appeal was pending before the Appellate Tribunal. - The court dismissed the petitioner's argument that their case should be settled under Section 124(1)(a) of the Finance Act, 2019. Final Orders: - The petitioner was ordered to pay an additional amount of Rs. 33,36,656/- within 30 days, provided they had already paid Rs. 1,66,83,286/- as per the interim order dated 17.03.2020. - The petitioner was also required to pay interest at 12% p.a. on the delayed payment. - If the petitioner failed to comply, the benefit of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 would not be extended to them. Modification of Order: - The court acknowledged the petitioner's compliance with the interim order and extended time granted by the Central Government. The petitioner had paid Rs. 1,66,83,286/- on 30.06.2020. - The court modified the operative portion of the order to reflect the petitioner's compliance and ordered the payment of the remaining amount with interest. Disposal: The writ petitions were disposed of with the above observations, and connected miscellaneous petitions were closed without costs.
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