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TMI Blog2022 (2) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... ted/determined amount payable i.e. by applying 40% under Section 124(c)(i) of the Finance (No.2) Act, 2019 on the said dues of Rs. 39,47,420/-. Some of the relevant facts for the purpose of deciding this petition are as under :- 3. The petitioner is engaged in providing security and detective agency services and was holding necessary registration under Service Tax law and now under GST law. The petitioner was paying appropriate service tax on the said services of security and detective agency provided by them. 4. It is the case of the respondents that during the verification of the data received from third party, it was observed that there was an apparent mismatch in the payment of Service Tax and the turnover of the assessee. As per third party data, Income Tax Department viz. ITR/ TDS data (Tax deducted at Source in Form-26AS), it was observed that the petitioner had shown income as per ITR/TDS for the period of 201314 as under:- Year Differential (Max-ST3) Service Tax payable on Differential (Max-ST3) 2013-14 3,36,32,851/- 41,57,020/- 5. According to the respondents, there was a non-payment of the differential Service Tax by the petitioner on variation of taxable value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer imposed a penalty of Rs. 10,000/- under Section 77(2) of the said Finance Act on the petitioner for failure of payment of tax electronically. The petitioner did not challenge the said order passed by the Assistant Commissioner, Central GST, Division-III, Kolhapur. 10. On 1st August 2019, the Finance (No.2) Bill/Act, 2019 was introduced/enacted wherein the Central Government introduced a special legacy scheme known as "Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019" (for short "the said SVLDR Scheme") for resolution of old tax disputes pending as on 30th June 2019 under the Central Excise and Service Tax laws. The said scheme existed for a limited period from 1st September 2019 to 31st December 2019 which was thereafter extended upto 15th January 2020. One of the conditions for availing the benefit of the scheme was that the dispute must be pending as on 30th June 2019 at any stage i.e. enquiry or investigation or audit or SCN or adjudication or appellate stage etc. 11. It is the case of the petitioner that to mitigate the issue, the petitioner opted for resolution of the dispute covered under the said Order-in-Original dated 23rd December 2019 under the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Tax Returns and Annual Financial Statement for the disputed period, accepted and confirmed the total Service Tax Liability to the extent of Rs. 39,47,420/- under Section 73(2) of the Finance Act, 1994 and had also demanded interest and penalty. 17. Learned counsel for the petitioner invited our attention to the said declaration in Form SVLDRS-1 on 31st December 2019 and submitted that in the said Form, the petitioner had specifically mentioned the date of Order-in-Original dated 23rd December 2019 assessing the tax liability of Rs. 39,47,420/-. The petitioner had also mentioned the category "Arrears" and sub-category "Appeal not filed or appeal having attained finality." The petitioner mentioned the 'tax dues' as Rs. 15,78,968/-. She submits that the petitioner did not file the said declaration for the availment of the said SLVDRS-1 on the basis of the amount of Service Tax demanded by the respondents under the said show cause notice dated 24th April 2019, but had filed the said declaration Form on the basis of the arrears of Service Tax dues of Rs. 39,47,420/under the said Order-in-Original dated 23rd December 2019 passed by the said Assistant Commissioner of Central GST, Divi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticularly Rule 3(2)(a) and (b) and submitted that since the petitioner had filed a declaration under 'category of arrears', the petitioner had filed a declaration under section 125(2)(b). Learned counsel for the petitioner also invited our attention to the forms required to be filed under different categories. 9.1 provides for the format for filing an application under litigation category. She submits that the case of the petitioner falls under 9.2 i.e. 'category of arrears'. 22. Learned counsel placed reliance on the judgment of this Court in case of Jyoti Plastic Works Pvt. Ltd. vs. Union of India & Ors., 2020 SCC Online Bom 2276 and also in case of Morde Foods Pvt. Ltd. & Anr. vs. Union of India and Others, 2021 SCC Online Bom 320 in support of her contentions. 23. Mr.Mishra, learned counsel for the respondents on the other hand submits that the respondents had issued a Show Cause-cumDemand Notice dated 24th April, 2019 to the petitioner for demand of Service Tax of Rs. 41,57,020/- on a taxable value of service of Rs. 3,36,32,851/- on the basis of data available for the financial year 2013-14. The respondents also proposed to invoke extended period i.e. from 2014-15 to 2017-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the further period from 2014-15 to June 2017 was done by the designated committee/respondent no.2 on the basis of the show cause notice which was also quantified in the Order-in Original passed on 23rd December, 2019. The amount of Rs. 40,52,220/- being 50% of the total tax liability calculated as of Rs. 81,04,440/- was as estimated by the designated committee/respondent no.2 and Form SVLDRS-02 was issued dated 19th February, 2020, with the remarks that 'the Show Cause cum Demand Notice dated 18th April, 2019 was under adjudication as on 30th June, 2019'. He submits that no arrears in the estimated amount was computed by the designated committee as per the said scheme on the basis of the facts on record. 28. It is submitted by the learned counsel that in the show cause notice issued by the respondent no.2 on 24th April, 2019 issued to the petitioner for demand of service tax of Rs. 41,57,020/- on a taxable value of service of Rs. 3,36,32,851/- was on the basis of data available for the financial year 2013-14. It was also proposed in the show cause notice to invoke extended period i.e. from 2014-15 to 2017-18 (upto June 2017 along with recovery of interest and penalty) on the non ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or which the data was available with the department and when compared with 26AS and assessee had deliberately suppressed the facts with an intention to evade service tax. It was provided that there was reason to believe that the said assessee had also failed to pay appropriate service tax for the subsequent period from April 2014 to June 2017. However, data for the same was not available at that time. It was provided that on it becoming available, equal or more amount of service tax inclusive of cesses not paid or short paid on taxable services provided by them for the period from April 2014 onwards along with interest thereon and penalties payable shall be demanded and recovered from them under provision of proviso to section 73(1) of the Act invoking extended period. It was further provided that the documents relied upon in this case was income tax return and ST-3 return data for year 2013-14. 33. A perusal of the reply dated 15th November, 2019 from the petitioner to the Assistant Commissioner, Division-III, Kolhapur in response to the said Show Cause-cum-Demand Notice dated 24th April, 2019 indicates that the petitioner had mentioned the annual turnover for the financial year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the figures of turnover are found matched with ITR and profit and loss account. The respondent no.2 accordingly accepted those figures for computation of service tax and liability of service tax worked out at Rs. 39,47,420/- and confirmed the said amount. 37. In the said order, the respondent no.2 confirmed the demand of Service Tax of Rs. 39,47,420/- against the petitioner under the provisions of section 73(2) of Finance Act, 1994 read with proviso to provisions of Section 73(1) of the Finance Act, 1994 and ordered to recover the amount of Rs. 39,47,420/- with interest at the rate as specified under section 75 of the Finance Act, 1994 and imposed penalty of Rs. 20,000/- for each return. It is not in dispute that the petitioner did not impugn the said assessment order. 38. The conjoint reading of show cause notice dated 24th April, 2019 and the said Order-in Original dated 23rd December, 2019 indicates that the amount of service tax worked out by the petitioner in response to the said show cause notice was accepted as worked out at Rs. 39,47,420/-. Though the said assessment order was passed on 23rd December, 2019, the respondents did not pass any additional order demanding the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emains that in the said assessment order, the respondents had considered issuance of the said show cause notice and had decided the amount of tax dues for the period for which the service tax returns were filed by the petitioner. The petitioner had furnished all the details of the taxable amount payable according to the petitioner for the entire period i.e. 2013-14 to 2017-18 (upto June 2017) in response to the said show cause notice. In our view, the petitioner having satisfied the conditions of section 124 and 125 (1) of the said scheme became eligible to the relief available to a declarant under the said provisions of the scheme. 42. Rule (3)(2)(b) of the said SVLDRS Rules prescribes the form of declaration under section 125 required to be filed on or before 31st December, 2019. For the purpose of the said rule, explanation (b) provides that the term 'case' means the amount in arrears. Rule 3(2) explanation (a) provided that 'case' means a show cause notice, or one or more appeal arising out of such notice which is pending as on 30th June, 2019. Under the said rule, there were four categories of cases in which the said form of declaration under section 125 of the said scheme co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said to be in existence after the order in original was passed on 29th March, 2006 which order had been accepted by the department. Quantification of dues had been done which was accepted by the department. Those amounts would now be the tax dues of the petitioner and that position would not change because of the subsequent order of the CESTAT dated 30th October, 2017 setting aside the order in original dated 29th March, 2006 for the purpose of deciding afresh the whole issue on merit, limitation etc. apart from quantification. 47. This Court held that having regard to the objective of the scheme, in a case of this nature, a reasonable and pragmatic approach has to be adopted so that a declarant can avail the benefits of the scheme; a declarant who seeks benefit under the scheme cannot be put in a worse off condition than he was before making declaration under the scheme. That would defeat the very purpose of the scheme. In our view, the principles laid down by this Court in case of Jyoti Plastic Works Pvt. Ltd. (supra) would apply to the facts of this case. In this case, the facts are even better though the facts before this Court in case of Jyoti Plastic Works Pvt. Ltd. (supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to make a declaration. The basic thrust of the scheme is to unload the baggage of pending litigations centering around service tax and excise duty. The focus is to unload this baggage of pre-GST regime and allow business to move ahead. 51. In our view, the impugned order is contrary to the object, the purpose and the intent of the Central Government to frame the said scheme as 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 and the basic thrust of the scheme is to unload the baggage of pending litigations centering around service tax and excise duty and deserves to be quashed and set aside. 52. In our view, the petitioner had rightly filed the said declaration form considering the tax dues as Rs. 39,47,420/- i.e. the amount of demand confirmed in the Order-in Original dated 23rd December, 2019 and had rightly computed an amount of Rs. 15,78,968/as estimated/determined amount payable i.e. by applying 40% under section 124(c)(i) Finance (No.2) Act, 2019 on the said dues of Rs. 39,47,420/-. 53. We accordingly pass the following order :- (i) Writ petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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