2022 (11) TMI 1148 - HC - Service Tax

Court quashes orders, remits claim for reconsideration under SVLDR Scheme.

The Court allowed the petition, quashing the impugned orders dated 06.05.2020 and 05.03.2021, and remitted the matter back to the respondents for ... Benefit under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - It is submitted that on 21.06.2019 itself, the petitioner had admitted and quantified the service tax payable by him of a sum of Rs.50,50,277/- and the same was done prior to 30.06.2019 as per the Scheme - HELD THAT:- The undisputed material on record indicates that on 21.06.2019 i.e., prior to the cut of date 30.06.2019, the petitioner had admitted and quantified the service tax payable by him as Rs.50,50,277/-. Since the petitioner has already made payment of the amount in respect of which, he had claimed the benefit under the SVLDRS scheme much prior to submitting Form SVLDRS-1, the petitioner would be entitled to avail the benefit under the SVLDRS Scheme and rejection of the same by the respondents by issuing the impugned communication is clearly arbitrary, illegal and contrary to law as well as the provisions of the said Scheme and the same deserves to be quashed - since the petitioner would be entitled to waiver of 50% of the sum of Rs.53,88,248/- is Rs.26,94,124/-, the sum of Rs.50,50,277/- which is already admitted/quantified and paid by him would be far in excess of the said 50% is Rs.26,94,124/-. Contention of the respondents that the petitioner would not be entitled to the benefit of the Scheme in view of discrepancy between the admitted/quantified amount and the amount shown in Form SVLDRS-1 cannot be accepted. Petition allowed. Issues Involved:1. Eligibility for benefit under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme).2. Validity of the impugned orders dated 06.05.2020 and 05.03.2021.3. Applicability of the bar of res judicata.4. Jurisdiction of the Court under Article 226 of the Constitution of India.Detailed Analysis:1. Eligibility for Benefit under the SVLDR Scheme:The petitioner submitted a declaration under the SVLDR Scheme on 28.12.2019, seeking waiver of Rs.53,88,248/-. The petitioner had admitted and quantified the service tax payable by him as Rs.50,50,277/- on 21.06.2019, prior to the cut-off date of 30.06.2019. Despite this, the respondents issued a Show Cause Notice on 07.01.2020 and subsequently rejected the petitioner's claim under the SVLDR Scheme on 06.05.2020, stating that the amount payable had not been quantified by 30.06.2019. The Court referred to a prior judgment in the case of M/s. Bioneeds India (P) Ltd., which held that the benefit under the SVLDR Scheme is applicable if the duty demand has been quantified on or before 30.06.2019, even if an enquiry or investigation is pending. The Court concluded that the petitioner, having admitted and quantified the service tax payable before the cut-off date, is entitled to the benefit under the SVLDR Scheme.2. Validity of the Impugned Orders Dated 06.05.2020 and 05.03.2021:The impugned order dated 06.05.2020 rejected the petitioner's claim under the SVLDR Scheme, and the subsequent order dated 05.03.2021 was based on this rejection. The Court found these orders to be arbitrary, illegal, and contrary to the provisions of the SVLDR Scheme. The Court noted that the petitioner had already paid the entire quantified amount of Rs.50,50,277/- before submitting Form SVLDRS-1. The Court highlighted that the discrepancy between the admitted amount and the amount mentioned in Form SVLDRS-1 does not disentitle the petitioner from claiming the benefit under the Scheme, as the petitioner is entitled to a waiver of 50% of the amount, which is Rs.26,94,124/-, and the paid amount exceeds this waiver.3. Applicability of the Bar of Res Judicata:The respondents contended that the petition is barred by res judicata due to the disposal of a previous petition (W.P.No.8051/2021). The Court clarified that the previous petition challenged the order dated 06.05.2020 and not the order in original dated 05.03.2021. Since there was no determination of any issue or question in the earlier petition, the bar of res judicata does not apply. The Court rejected the respondents' contention, stating that the present petition is not barred by res judicata.4. Jurisdiction of the Court under Article 226 of the Constitution of India:The respondents argued that the order in original was not stayed by any authority, and thus, the petition is not maintainable under Article 226. The Court noted that the order in original dated 05.03.2021 was passed during the pendency of the previous petition, and the lack of interim protection does not preclude the maintainability of the present petition. The Court emphasized that the impugned orders were passed based on an erroneous rejection of the petitioner's claim under the SVLDR Scheme, warranting judicial interference.Conclusion:The Court allowed the petition, quashing the impugned orders dated 06.05.2020 and 05.03.2021. The matter was remitted back to the respondents for reconsideration of the petitioner's claim under the SVLDR Scheme, in accordance with the relevant circulars and the observations made in the judgment.