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TMI Blog2023 (1) TMI 1188X X X X Extracts X X X X X X X X Extracts X X X X ..... l estate and related activities. Petitioner is stated to be registered under the Service Tax Rules, 1994 and upon coming into force of the CGST Act with effect from 1 July 2017, Petitioner is stated to have registered under the CGST Act as well. 3. Petitioner's case is that it had constructed a Public Parking Lot (PPL) on plot of land bearing No. C.S. No.2/1629 of Lower Parel Division, Plot No. 249, 249-A of Worli Scheme No. 52, G/S Ward, Opp. Hind Cycle Company, B. P. Road, Mumbai 400025 (the "said plot"). 4. That the Municipal Corporation of Greater Mumbai ("MCGM) by its letter dated 5 May 2012 approved the proposal of grant of incentive FSI over and above the normal FSI to the Petitioner against the construction of the said PPL on the said plot. 5. Pursuant to the visit of the Superintendent, Directorate General of GST Intelligence, Mumbai ("DGGSTI") and his team to the office of the Petitioner on 15 February 2018, Petitioner vide its letter of the same date informed the Superintendent that it had handed over the said PPL to MCGM. These facts have not been disputed by the Respondents. 6. Vide letter dated 23 March 2018 to DGGSTI, Petitioner is stated to have provided details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner that thereafter, Petitioner did not receive any other communication, but to its surprise received a Show Cause Notice dated 21 June 2021 from Respondent No.6- Deputy Director, Directorate General of GST Intelligence to show cause as under:- A. The extended period envisaged under proviso to sub-section (1) of section 73 of the Finance Act, 1994 read with Rule 14 of the Cenvat Credit Rules, 2004 which has been kept in force in the GST era vide section 142 & 174 of the Central Goods and Services Tax Act, 2017 should not be invoked to demand the Service Tax evaded by them for the reasons discussed above: B. An amount equal to Cenvat credit to the tune of s. 1,25,96,355/- (Rupees One crore twenty five lakhs ninety six thousand three hundred fifty five only) inclusive of Education Cess, Higher Secondary Education Cess, Swatch Bharat Cess, Krishi Kalyan Cess taken by them during the period from October 2015 to December 2016 on input/inputs services in relation to Public Parking Lot (PPL) should not be demanded and recovered item them under Rule 6(3) (I) of CCR, 2004 read with Rule 14 of CCR, 2004 read with proviso to sub-section (I) of Section 73 of the Finance Act 1994. C. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter dated nil March 2020 rejecting the declaration filed by Petitioner. 20. It is the Petitioner's case that Petitioner never received the said communication of rejection of the declaration on 20 March 2020 either from Respondent No.4 or from the Designated Committed, prior to the 4th Respondent's letter dated 17 February 2022, by which the letter dated Nil March, 2020 rejecting the declaration was enclosed. 21. Aggrieved by the aforesaid, Petitioner has preferred this Writ Petition submitting that rejection of the declaration filed by Petitioner under Section 125(2) of the Finance Act, 2019 is ex-facie, arbitrary, unreasonable and contrary to the scheme and in breach of principles of natural justice and liable to be set aside on the grounds mentioned in the petition. The Petitioner has prayed for the following reliefs: "(a) that this Hon'ble Court be pleased to issue writ of Certiorari or any other appropriate writ, order or direction in nature of certiorari calling for the records of the Petitioners' case and after examining the legality and validity thereof be pleased to quash and set aside communication dated Nil March, 2020 of the Deputy Commissioner (SVLDRS), CGST & CX. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justice. 27. Reliance has also been placed by learned Counsel for Petitioner on Section 123(c) of the Finance Act, 2019, to submit that this is a case where the amount of duty payable under Service Tax law has been quantified on or before 30 June 2019. 28. Learned Counsel also refers to Clause (e) of Section 125(1) to submit that all persons are eligible to make a declaration except, inter alia, who have been subjected to an enquiry or investigation or audit and the amount of duty involved in the said enquiry or investigation or audit has not been quantified on or before the 30 June 2019. 29. Learned Counsel also refers to the letter dated 23 March 2018 from Petitioner to DGGSTI, Mumbai to submit that the said communication clearly admits Cenvat Credit taken of Service Tax, Education Cess, Secondary & Higher Education Cess, Krishi Kalyan Cess aggregating to Rs. 4,60,96,697/- to be the amount quantified before 30 June 2019 as per SVLDRS which amount was not disputed by the Respondents-Authorities and therefore "Nil" SVLDRS-2 was issued by Designated Committee. 30. It is submitted that the said communication clearly falls within the definition of "quantified" as per Section 121( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion that whenever the SVLDRS-2 is issued to the declarant, there is no funtionality in the SVLDRS portal to reject the application online and therefore, the board has instructed that such applications may be rejected manually on merits. 39. It is submitted that since the Petitioner was not eligible for the Scheme as the tax amount was not quantified as on 30 June 2019, Petitioners declaration was rejected, pursuant to communication from the DGGI, Mumbai dated 27 February 2020 to the Designated Committee. 40. It is further submitted on behalf of the Respondents that the Show Cause Notice issued to Petitioner is dated 21 June 2021, which demonstrates that the amount was not quantified as on 30 June 2019. Therefore, Petitioner could not have filed application for the tax dues of Rs. 4,60,96,697/- as the Show Cause Notice dated 21 June 2021 was issued for a demand of Rs. 1,25,96,355/-. 41. The reply refers to the definition of "quantified" as provided in Section 121 (r) to submit that quantification would refer only to the amount of duty and not any other amount including interest, penalty, etc. 42. Reliance has also been placed on behalf of Respondents upon Clause (g) of paragrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Chapter V of the Finance Act, 2019 provides for the relief available under the Scheme, declaration to be made thereunder, the verification of declaration by the Designated Committee, the statement by Designated Committee, issue of discharge certificate, restrictions of the scheme and the power to make rules to issue orders, instructions, etc. 49. Before we proceed further, it would be apposite to set out the various provisions, clarifications, Frequently Asked Questions(FAQs), relied upon on behalf of the parties. 50. Section 121 defines various terms that are used in the Scheme. Section 121(m) defines "enquiry or investigation" as under:- "121... ............... ............. (m) "enquiry or investigation", under any of the indirect tax enactment, shall include the following actions, namely:- (i) search of premises; (ii) issuance of summons; (iii) requiring the production of accounts, documents or other evidence; (iv) recording of statements;" (emphasis supplied) 51. Section 121 (r) defines the term "quantified" as under:- "(r) "Quantified", with its cognate expression, means a written communication of the amount of duty payable under the indirect tax enac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n will include a letter intimating duty/tax demand or duty/tax liability admitted by the person during enquiry, investigation or audit or audit report etc." FAQ.53. The amount quantified under an enquiry, investigation or audit on or before 30.06.2019 gets modified subsequently due to any reason. Will I still be eligible to file a declaration under the Scheme? Ans. Only such cases of enquiry, investigation or audit are covered under the Scheme where the duty/tax demand has been finally worked out on or before 30.06.2019. In other words, all the evidence/document gathering process is over and the tax liability has been worked out on or before 30.06.2019. For instance, a Draft Audit Report or the Final Audit Report has been issued on or before 30.06.2019. Similarly, a letter intimating duty demand has been issued by the department. These would include those cases also where the duty/tax demand undergoes a change only due to any clerical or calculation error". 55. A Division Bench of this Court in the case of RS HR Team Solutions Pvt. Ltd. (supra) relied upon by learned Counsel for Petitioner, while considering the eligibility of Petitioners therein and maintainability of the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re 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." 18. Subsequently, in M/s G.R.Palle Electricals Vs. Union of India, 2020 TIOL-2031-HC-MUM-ST=2021(45) G.S.T.L.10(Bom.), 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 admitted the service tax liability of Rs.60 lakhs (approximately) to be outstanding for the period from 2015-2016 to June, 2017. This was corroborated by the departmental authority in the letter dated 24.01.2018 which we have already noted and discussed. Therefore, present is a case where there is acknowledgment by the petitioner of the duty liability as well as by the department in its communication to the petitioner. Thus, it can be said that in the case of the petitioner the amount of duty involved had been quantified on or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing 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 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 that an amount of Rs.1,20,60,000.00 was already paid. * * * * * * * * Following the above it is evident that the word 'quantified' under the scheme would mean a written communication of the amount of duty payable which will include a letter intimating duty demand or duty liability admitted by the person concerned during enquiry, investigation or audit or audit report and not necessarily the amount crystalized following adjudication. Thus, petitioner was eligible to file the declaration in terms of the scheme under the categ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtainment of cenvat credit of Service Tax, Education Cess, Secondary & Higher Education Cess and Krishi Kalyan Cess, the company has ascertained applicable interest of Rs. 1,80,81,197/- on service tax, interest of Rs. 3,46,099/- on education cess, interest of Rs. 1,73,043/- on Secondary & Higher Education Cess and interest of Rs. 14,137/- on Krishi Kalyan Cess for the relevant period. 61. By the said communication it was submitted that the Petitioner is entitled to the cenvat & input tax credits since ultimate sale of flats was liable to tax as they had paid the same there would be no reason to issue Show Cause Notice nor impose any penalty and the proceedings be closed as they had complied with provisions of the Service Tax, MVAT and GST law. There has been no reply to this communication. 62. This amount of Rs. 4,60,96,697/-, in our view, would fall within the definition of Section 121 (r) as a quantified amount being pursuant to a written communication of the amount payable under the indirect tax enactment in a case where an investigation though may have been pending but the amount had been quantified before 30 June 2019. Section 123 (c) as well as Section 125 (1)(e) of the Fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents with respect to the said Form as well as the hearing that was fixed at the appointed date and time, the Respondent-Authorities cannot renege on the same. Particularly so in the peculiar facts and circumstances of this case, where admittedly, the rejection of SVLDRS-1 was not communicated to Petitioner on 20 March 2020, but only communicated to them on 17 February 2022 i.e. after a request came from Petitioner to issue Form SVLDRS-4. 66. Therefore, having held that the amount of Rs. 4,60,96,697/-, is the amount quantified pursuant to communication dated 23 March 2018 to the DGGSTI and the Designated Committee having issued Form SVLDRS-2 to Petitioner on 16 January 2020 and the communication of rejection having been communicated to Petitioner only on 17 February 2022, we are of the view that the action of the Respondent Authorities ought to be quashed and set aside. 67. As a result of the above discussion, the communication dated nil March, 2020 as well as the Show Cause Notice dated 21 June 2021 cannot be sustained and are hereby quashed and set aside. 68. The Respondents are directed to constitute Designated Committee to consider the SVLDRS-1 declaration filed by Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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