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TMI Blog2021 (2) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents and accepted as a pre-deposit while determining the outstanding dues payable by the petitioner. After issuance of the show cause-cum-demand notice dated 20.04.2012, petitioner has stated that it had made further payments of ₹ 46,44,094.00 covering the period under investigation through its client M/s. Walchandnagar Industries Limited; in addition further sum was paid which pertained to the period from 01.04.2011 to 31.03.2012 which was beyond the period of investigation. This amount was not accepted as payments made on behalf of the petitioner by the adjudicating authority i.e., the Commissioner on the ground that no evidence was submitted to that effect. Regarding the further payments made by the petitioner to the extent of ₹ 56,11,819.00, stand taken by the respondents is that the challans pertaining to payment of the aforesaid amount were from August, 2013 to April, 2015. Designated committee could not ascertain whether the said payment was for the period covered by the investigation or for the period beyond the investigation. Therefore, designated committee could not provide relief to the petitioner vis-a-vis the amount of ₹ 56,11,819.00. In paragr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peaking order with due intimation to the petitioner. Matter is remanded back to respondent No.3 for taking a fresh decision in the matter after giving due opportunity of hearing to the petitioner which shall be informed about the place, date and time of hearing. Respondent No.3 shall thereafter pass a speaking order in accordance with law with due intimation to the petitioner - Petition allowed by way of remand. - WRIT PETITION (ST) NO.5293 OF 2020 - - - Dated:- 28-1-2021 - UJJAL BHUYAN ABHAY AHUJA, JJ. Mr. Bharat Raichandani i/b. UBR Legal for Petitioner. Mr. Sham Walve for the Respondents. JUDGMENT and ORDER : (Per Ujjal Bhuyan, J.) Heard Mr. Bharat Raichandani, learned counsel for the petitioner and Mr. Walve, learned counsel for the respondents. 2. By filing this petition under Article 226 of the Constitution of India, petitioner seeks quashing of order dated 25.02.2020 issued by respondent No.3 and further seeks a direction to the said respondent to reconsider its declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 by allowing pre-deposit made by the petitioner to the extent of ₹ 1,02,55,913.00. 3. Case of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 01.04.2011 to 31.03.2012 which was beyond the period of investigation. 9. Petitioner has stated that it had made additional payment of ₹ 56,11,819.00 towards the service tax demand for the period from 01.04.2006 to 31.03.2011. Thus, against the outstanding service tax demand of ₹ 3,76,12,232.00, petitioner had made payment of the following amounts:- ₹ 1,30,00,000.00 + ₹ 46,44,094.00 + ₹ 56,11,819.00 = ₹ 2,32,55,913.00 10. According to the petitioner, without appreciating the above, Commissioner of Central Goods and Services Tax (CGST) and Central Excise, Belapur passed the order-in-original dated 27.09.2018 confirming the demand of service tax of ₹ 3,76,12,232.00 and appropriated the amount of ₹ 1,30,00,000.00 as payment towards the service tax dues. However, the two payments of ₹ 46,44,094.00 and ₹ 56,11,819.00, totalling ₹ 1,02,55,913.00, were not included as payments made by the petitioner. It may be mentioned that on and from 1st July, 2017, the goods and services tax (GST) regime came into force replacing the earlier indirect tax enactments including service tax under the Finance Act, 1994. 11. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above matter was held before respondent No.3 on 31.01.2020. Petitioner appeared in the personal hearing and submitted that apart from ₹ 1,30,00,000.00 paid by the petitioner before issuance of show cause-cum-demand notice, petitioner had made further deposit of ₹ 1,02,55,913.00 submitting details of all challans in this regard. Petitioner vide letter dated 03.02.2020 again submitted the details of 33 challans evidencing payment of service tax dues amounting to ₹ 56,11,819.00. In addition, petitioner submitted a certificate of a practising Chartered Accountant certifying that the said challans pertained to payment of service tax liability covering the period from the year 2006-07 to 2010-11. That apart, it was pointed out that out of the payment of ₹ 65,00,000.00 made by M/s. Walchandnagar Industries Limited as per the first challan dated 04.06.2012, an amount of ₹ 46,44,094.00 was towards payment of service tax dues of the petitioner for the financial year 2010-11 while the remaining amount was for the service tax liability of the financial year 2011-12. Affidavit dated 07.02.2020 was also filed by the petitioner. This was followed by another letter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner has filed rejoinder affidavit. While reiterating the contentions and pleadings made in the writ petition, it has been averred that the designated committee instead of verifying the authenticity of payments made by the petitioner or on behalf of the petitioner, relied on incorrect findings of the adjudicating authority i.e., the Commissioner. Designated committee ought to have carried out verification of the payments / challans de-hors the order-in-original and ought to have arrived at an independent conclusion. Referring to the averments made in paragraph 21 of the reply affidavit, petitioner has stated that it is an admission by the respondents that verification of the pre-deposit made by the petitioner was incomplete before issuing the impugned order. Certificate of the Chartered Accountant and affidavit filed by the petitioner were ignored. Payment of ₹ 56,11,819.00 has been made to the service tax department and this is not in dispute. The fact that no service tax returns was filed post March, 2012 itself goes to show that the above payment was not utilized towards that period. No show cause notice has been issued post 2012 as well. 22. Mr. Raichandani, learned cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw, this Court may intervene in the matter and grant the reliefs as sought for by the petitioner. 25. Submissions made by learned counsel for the parties have been duly considered. Also perused the materials on record. 26. Basic grievance of the petitioner is non-acceptance or rather disallowance by the designated committee i.e., respondent No.3 of two payments made by the petitioner i.e., ₹ 46,44,094.00 through its client M/s. Walchandnagar Industries Limited and additional payment of ₹ 56,11,891.00 totalling ₹ 1,02,55,913.00 as pre-deposit made by the petitioner thus resulting in the amount payable by the petitioner being quantified at ₹ 58,06,116.00 which it says is not required to be paid under the scheme. 27. From the factual narrative laid out above what is deducible is that service tax department had initiated investigation against the petitioner on the ground of alleged non-payment of service tax dues covering the period from 01.04.2006 to 31.03.2011. During the investigation period, petitioner had made a deposit of ₹ 1,30,00,000.00. This is admitted by the respondents and accepted as a pre-deposit while determining the outstanding due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons with respect to the scheme reads as under:- The scheme is a one time measure for liquidation of past disputes of central excise and service tax as well as to ensure disclosure of unpaid taxes by a person eligible to make a declaration. The scheme shall be enforced by the Central Government from a date to be notified. It provides that eligible persons shall declare the tax due and pay the same in accordance with the provisions of the scheme. It further provides for certain immunities including penalty, interest or any other proceedings under the Central Excise Act, 1944 or Chapter V of the Finance Act, 1994 to those persons who pay the declared tax dues. 30. Central Board of Indirect Taxes and Customs (briefly the Board hereinafter) issued circular dated 27th August, 2019 informing all the Principal Chief Commissioners / Chief Commissioners / Principal Director Generals and Director Generals that the central government had announced the scheme as part of the union budget for the year 2019-20. The aforesaid authorities were also informed about notification of Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019. It was stated thus :- 2. As may be appreci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determined in terms of the scheme would be entitled to certain benefits in the form of reduced tax liability, waiver of interest, fine, penalty and immunity from prosecution. This is a beneficial scheme for settlement of legacy disputes. Therefore, the officials while considering declarations made under the scheme must have the broad picture in mind. The approach should be to ensure that the scheme is successful and, therefore, a liberal view embedded with the principles of natural justice is called for. 33. Section 126 deals with designated committee. As per sub-section (1), the designated committee shall verify correctness of the declaration made by the declarant under section 125 in such manner as may be prescribed. However, as per the proviso, no such verification shall be made in a case of voluntary disclosure. Sub-section (2) deals with composition and function of designated committee. 33.1. So from sub-section (1) of section 126, we find that designated committee is mandated to verify correctness of the declaration made by a declarant in such manner as may be prescribed. 34. In exercise of the powers conferred by sub-sections (1) and (2) of section 132 of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eping the above objective in mind. The verification required to be carried out by the designated committee is certainly not an adjudicatory exercise or an appellate exercise. Viewed in the above context and keeping in mind the object of the scheme, verification of a declaration by the designated committee cannot be confined to the show cause-cum-demand notice or to the order-in-original. Mandate of the designated committee is to verify correctness of the declaration based on the particulars furnished by the declarant as well as the records available with the department. 39. In the instant case, as against the petitioner s claim of pre-deposit of two amounts of ₹ 46,44,094.00 and ₹ 56,11,819.00, designated committee did not accept payments of the two amounts as pre-deposit. In fact in the impugned order dated 25.02.2020, which is in Form No.SVLDRS-3, no reasons have been assigned for exclusion of the two amounts. It is only in the reply affidavit that respondents have justified non-allowance of the two payments as pre-deposit. In so far payment of ₹ 46,44,094.00 is concerned, respondents have fallen back upon the order passed by the adjudicating authority i.e., ..... X X X X Extracts X X X X X X X X Extracts X X X X
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