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TMI Blog2021 (3) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Companies Act, 1956 having its registered office at Mittal Tower, Nariman Point, Mumbai. Petitioner is engaged in the business of executing civil, mechanical and construction contracts for its clients. Being a service provider, it was registered as such under the Finance Act, 1994. 4. Petitioner has stated that it did not receive legitimate payments for construction of Bina refinery from Bharat Oman Limited with whom it had entered into a service contract during the period 2008-10. Consequently, petitioner was not able to discharge its service tax liability for the period from 01.04.2015 to 30.06.2017. 5. Summons dated 19.12.2019 was issued to the petitioner by the office of Principal Commissioner of Central GST, Mumbai South Commissionerate. The summons was issued under section 70 of the Central Goods and Services Tax Act, 2017 (briefly 'the CGST Act' hereinafter). Petitioner was informed that an enquiry against it was being carried out. Summoning authority had reasons to believe that petitioner was in possession of facts / information / documents / records material to the above enquiry. Therefore, petitioner was asked to comply with the summons and furnish the information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliefs as indicated above. 13. Respondents have filed a common affidavit through Shri. Vinod Nautiyal, Assistant Commissioner of CGST and Central Excise, Mumbai South Commissionerate. Stand taken in the affidavit is that specific intelligence input was received by the Anti-Evasion Officer, CGST, Mumbai South regarding non-payment of service tax by the petitioner. Acting on the basis of such intelligence input, premises of the petitioner was visited by officials working in the Mumbai South Commissionerate on 19.12.2019. This was followed by summons dated 19.12.2019. 14. Shri. Sanjay P. Ahire, Accountant and Shri. Kishan Chand Agarwal, Legal Consultant appeared before the Superintendent, AntiEvasion on 19.12.2019 on behalf of the petitioner whereafter their statements were recorded under section 14 of the Central Excise Act, 1944 read with section 83 of the Finance Act, 1994 and section 70 of the CGST Act. In their statement, the two officials admitted service tax liability of the petitioner of Rs. 94,26,823.00 for the period from 01.04.2015 to 30.06.2017 payable along with interest and penalty. 15. Petitioner's declaration under the scheme was rejected on 29.01.2020 on the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner ought not to have been rejected. 19.1. Even if the said summons is construed to be one for service tax purpose then also it was issued on 19.12.2019. Referring to various provisions of the scheme, he submits that an overall reading of the scheme would indicate that 30.06.2019 is the cut-off date for determination of eligibility of a declarant under the scheme. Therefore, initiation of enquiry against the petitioner after 30.06.2019 on 19.12.2019 cannot be a ground for rejection of the declaration of the petitioner. 19.2. Referring to question No.39 and the answer given thereto in the FAQs as well as to the circular of the Board dated 12.12.2019, he submits that clause (f) of sub-section (1) of section 125 which says that a person making a voluntary disclosure after being subjected to any enquiry or investigation or audit would not be eligible to make a declaration under the scheme should not be read in isolation. It should be read in the overall context of the scheme and if so read it would mean that such enquiry or investigation or audit should be prior to 30.06.2019. In this connection, learned counsel for the petitioner has placed reliance on a decision of the Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and recording of statements. 23.1. Section 123 deals with tax dues for the purposes of the scheme. As per section 123 (d) for the purposes of the scheme, tax dues would mean the total amount of duty stated in the declaration where the amount has been voluntarily disclosed by the declarant. 23.2. Reliefs available under the scheme are provided in section 124. As per clause (e) of sub-section (1) of section 124 where the tax dues are payable on account of a voluntary disclosure by the declarant then no relief shall be available with respect to tax dues. 23.3. Section 125 deals with eligibility to make declaration under the scheme. Sub-section (1) opens with the words 'all persons shall be eligible to make a declaration under this scheme' except those mentioned in clauses (a) to (h). Thus, from the language of sub-section (1) of section 127 it can safely be said that eligibility to make a declaration is the norm and ineligibility is the exception. As per clause (f)(i), a person making a voluntary disclosure after being subjected to any enquiry or investigation or audit shall not be eligible to make a declaration under the scheme. At this stage, we may mention that as per exclusion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultimately was considered to be in tune with the object set out in the statement of objects and reasons and in the Preamble. Apart from the fact that the observations contained in the decision have to be understood in the light of the issue raised and exercise undertaken by the Court therein, the fallacy in the submission on behalf of the appellant lies though not in the principles of construction to be adopted but in the assumption of the counsel to confine or restrict and construe the law in question to be one made to regulate the trade of sawing, contrary to the very Preamble which reads, To make provisions for regulating in the public interest the establishment and operation of saw mills and saw pits and trade of sawing for the protection and conservation of forest and the environment (emphasis applied)." 25. While at the scheme, we may also mention that as per the proviso to sub-section (1) of section 126, no verification shall be made by the designated committee in case where a voluntary disclosure of an amount of duty has been made by the declarant. This is perhaps because of the fact that under section 124(1)(e), where tax dues are payable on account of voluntary disclosu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deals with tax dues for the purposes of the scheme, as per clause (c) thereof where an enquiry or investigation or audit is pending against the declarant, the tax dues would mean the amount of duty payable which had been quantified on or before 30.06.2019. Even in the context of eligibility under section 125(1), we find that clause (e) thereof clarifies that any person subjected to an enquiry or investigation or audit and the amount of duty involved in the said enquiry or investigation or audit had not been quantified on or before 30.06.2019 would not be eligible to make a declaration. Therefore, whenever and wherever the scheme talks about an enquiry or investigation or audit, the date 30.06.2019 carries considerable significance and becomes relevant. The enquiry or investigation or audit should commence prior to 30.06.2019. Though clause (f) of sub-section (1) of section 125 does not mention the date 30.06.2019 by simply saying that a person making a voluntary disclosure after being subjected to any enquiry or investigation or audit would not be eligible to make a declaration, the said provision if read and understood in the proper context would mean making of a voluntary disclo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 52. We have one more reason to take such a view. As has rightly been declared by the Hon'ble Finance Minister and what is clearly deducible from the statement of object and reasons, 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 basic thrust of the scheme is to unload the baggage of pending litigations centering ..... X X X X Extracts X X X X X X X X Extracts X X X X
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