2023 (2) TMI 14 - HC - Service Tax

Court protects Petitioner's benefits under Sabka Vishwas Scheme despite post-June 2019 investigations.

Access Platform Equipments Limited Versus The Union of India, The Principal Commissioner, CGST, Central Excise & Service Tax, Mumbai, The Commissioner, CGST & Central Excise, Belapur, The Designated Committee, CGST, Central Excise & Service Tax, Navi Mumbai, Joint Commissioner CGST, Central Excise & Service Tax Belapur Commissionerate,

The Court ruled in favor of the Petitioner, holding that investigations initiated after 30 June 2019 should not disqualify them from availing benefits ... Benefit under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 denied - denial on the ground that investigation is pending against the Petitioner - HELD THAT:- The Division Bench of this Court, in the case of M/S. NEW INDIA CIVIL ERECTORS PRIVATE LIMITED VERSUS UNION OF INDIA AND OTHERS [2021 (3) TMI 545 - BOMBAY HIGH COURT], has dealt with this stand of the Respondents that for the category of voluntary disclosure under Section 125 of the Finance Act, there is no mention to the date of 30 June 2019, and have held that, by adopting liberal interpretation, it will have to be held that the pendency of the investigation/enquiry on 30 June 2019 referred to Section 125 of the Act of 2019 is also relevant for the voluntary disclosure category under Section 125 (1)(f)(i) of the Act of 2019. The impugned rejections of the declarations filed by the Petitioner on 15 January 2020 under the Scheme of 2019 are quashed and set aside. The Respondents will process the declarations filed by the Petitioner for the years 2015-16, 2016-17 and 2017-18 as per law and pass necessary orders within a period of eight weeks from the date order is uploaded. Petition allowed. Issues:1. Denial of benefit under the Sabka Vishwas Scheme due to pending investigation.2. Interpretation of Section 125(1)(f)(i) of the Finance Act, 2019 regarding voluntary disclosure.3. Rejection of declarations under the Sabka Vishwas Scheme for specific financial years.4. Legal implications of investigation initiation post 30 June 2019.Analysis:1. The Petitioner sought relief under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, which was denied due to an ongoing investigation against them. The Petitioner contended that the investigation was initiated after 30 June 2019, making them eligible for the scheme as per Section 125(1)(f)(i) of the Finance Act, 2019.2. The crux of the issue revolved around the interpretation of Section 125(1)(f)(i) of the Finance Act, 2019. The Petitioner argued that the relevant date for determining eligibility under the voluntary disclosure category was 30 June 2019, and any investigation initiated post that date should not disqualify them from availing the benefits of the scheme.3. The Petitioner filed declarations under the Sabka Vishwas Scheme for the financial years 2015-16, 2016-17, and 2017-18, categorizing them as 'Voluntary Disclosure.' However, these declarations were repeatedly rejected by the Designated Committee citing ongoing investigations as the reason for ineligibility.4. The Court referred to previous judgments, including the case of New India Civil Erectors Pvt. Ltd. and UCC Infrastructure Pvt. Ltd., where it was held that the pendency of investigation/enquiry as of 30 June 2019 was crucial for determining eligibility under the voluntary disclosure category of Section 125(1)(f)(i) of the Finance Act, 2019. The Court emphasized that investigations initiated after the specified date should not render the declarant ineligible for the scheme.5. Consequently, the Court quashed the rejections of the Petitioner's declarations under the Sabka Vishwas Scheme and directed the Respondents to process the declarations for the relevant financial years in accordance with the law within eight weeks. The Court also allayed the Petitioner's concerns regarding coercive actions by the Respondents, stating that no action would be taken based on the rejected declarations.In conclusion, the judgment favored the Petitioner by interpreting the relevant provisions of the Finance Act, 2019 in their favor, allowing them to avail the benefits of the Sabka Vishwas Scheme despite the ongoing investigation initiated post the crucial date of 30 June 2019.