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TMI Blog2021 (3) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... rector, Directorate General of GST Intelligence, Mumbai Zonal Office. 3. First petitioner is a proprietary concern of the second petitioner. Petitioner No.1 is in the business of providing clearing and forwarding services to various clients in the shipping line besides carrying on related business. 4. On 04.06.2016, respondent No.2 visited the office of petitioner No.1 and sought certain information regarding payment of service tax. In this connection, a summons of even date was issued by respondent No.2 calling upon petitioner No.2 to tender his statement and to submit necessary documents and record. 5. Pursuant to such summons, petitioner No.2 got his statement recorded on 04.06.2019 and again on 12.06.2019. The statements were recorded under section 70 of the Central Goods and Services Tax Act, 2017 read with section 174 of the said Act and section 83 of the Finance Act, 1994. In the statement recorded on 12.06.2019, question No.2 put to petitioner No.2 by the Senior Intelligence Officer was what was the turnover and what was the quantum of service tax paid by petitioner No.1 from 2014 onwards? While answering the above query, petitioner No.2 summarized the service tax liabil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The quantified tax amount disclosed was Rs. 1,96,02,184.00. Since the declaration pertained to investigation by DGGI, report from the DGGI, Mumbai Zonal Unit was called for. As per report dated 20.02.2020, investigation was initiated by DGGI against the declarant. In the course of the investigation, the proprietor i.e., petitioner No.2 in his reconciliation statement dated 12.06.2019 admitted to a gross liability of Rs. 1,73,12,978.00 though he claimed exemption from payment of service tax on Ocean Freight. However, after investigation was concluded, the total liability including service tax on Ocean Freight was quantified at Rs. 1,96,02,184.00. Following this, show cause-cum-demand notice dated 13.11.2019 was issued by office of respondent No.2. Thus, as per the report from DGGI, the tax dues were not fully quantified before 30.06.2019. It was quantified only on 13.11.2019 i.e., after the cut-off date of 30.06.2019. Another contention advanced is that the total duty involved i.e., the final quantified amount during investigation would be considered for relief provided the quantification is communicated before 30.06.2019. Since that was not done, designated committee rightly reject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat on the one hand there is a letter of respondent No.3 to the petitioner quantifying the service tax liability for the period 1st April, 2016 to 31st March, 2017 at Rs. 47,44,937.00 which quantification is before the cut off date of 30th June, 2019 and on the other hand for the second period i.e. from 1st April, 2017 to 30th June, 2017 there is a letter dated 18th June, 2019 of the petitioner addressed to respondent No.3 admitting service tax liability for an amount of Rs. 10,74,011.00 which again is before the cut off date of 30th June, 2019. Thus, petitioner's tax dues were quantified on or before 30th June, 2019. 50. In that view of the matter, we have no hesitation to hold that petitioner was eligible to file the application (declaration) as per the scheme under the category of enquiry or investigation or audit whose tax dues stood quantified on or before 30th June, 2019." 16. Subsequently in M/s. G.R. Palle Electricals Vs. Union of India, 2020-TIOL-2031-HC-MUM-ST = 2020 (11) TMI 845 - BOMBAY HIGH COURT, this Court held as follows:- "27. We have already noticed that proprietor of the petitioner in his statement recorded on 11.01.2018 by the investigating authority admitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it abundantly clear that cases under an enquiry, investigation or audit where the duty demand had been quantified on or before 30.06.2019 would be eligible under the scheme. The word "quantified" has been defined under the scheme as a written communication of the amount of duty payable under the indirect tax enactment. In such circumstances, Board clarified that such written communication would include a letter intimating duty demand or duty liability admitted by the person during enquiry, investigation or audit etc. 23. Reverting back to the facts of the present case we find that there is clear admission / acknowledgment by the petitioner about the service tax liability. The acknowledgment is dated 27.06.2019 i.e., before 30.06.2019 both in the form of letter by the petitioner as well as statement of its Director, Shri. Sanjay R. Shirke. In fact, on a pointed query by the Senior Intelligence Officer as to whether petitioner accepted and admitted the revised service tax liability of Rs. 2,47,32,456.00, the Director in his statement had clearly admitted and accepted the said amount as the service tax liability for the period from 2015-16 upto June, 2017 with further clarification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Board dated 27.08.2019 and answers to question Nos. 3 and 45 of the Frequently Asked Questions, a view can legitimately be taken that the requirement under the scheme is admission of tax liability by the declarant during inquiry, investigation or audit report. It is not necessary that the figures on such admission should have mathematical precision or should be exactly the same as the subsequent quantification by the authorities in the form of show-cause notice etc. post 30.06.2019. The object of the scheme is to encourage persons to go for settlement who had bonafidely declared outstanding tax dues prior to the cut off date of 30.06.2019. The fact that there could be discrepancy in the figure of tax dues admitted by the person concerned prior to 30.06.2019 and subsequently quantified by the departmental authorities would not be material to determine eligibility in terms of the scheme under the category of inquiry, investigation or audit. What is relevant is admission of tax dues or duty liability by the declarant before the cut off date. Of course the figure or quantum admitted must have some resemblance to the actual dues. In our view, petitioner had fulfilled the said requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e declarant, then it would be in complete defiance of logic and contrary to the very object of the scheme to outrightly reject an application (declaration) on the ground of being ineligible without giving a chance to the declarant to explain as to why his application (declaration) should be accepted and relief under the scheme should be extended to him. Summary rejection of an application without affording any opportunity of hearing to the declarant would be in violation of the principles of natural justice. Rejection of application (declaration) will lead to adverse civil consequences for the declarant as he would have to face the consequences of enquiry or investigation or audit. As has been held by us in Capgemini Technology Services India Limited (supra) it is axiomatic that when a person is visited by adverse civil consequences, principles of natural justice like notice and hearing would have to be complied with. Non-compliance to the principles of natural justice would impeach the decision making process rendering the decision invalid in law." 23. While on natural justice we may also mention that respondents have averred in their affidavit that report from the DGGI, Mumbai Z ..... X X X X Extracts X X X X X X X X Extracts X X X X
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