2024 (4) TMI 303 - HC - Service Tax

Discharge Certificate under Sabka Vishwas Scheme 2019 bars reopening of assessments for specified period

Bombay HC held that a Discharge Certificate in Form SVLDRS-4 issued under the Sabka Vishwas Scheme 2019 was conclusive for the specified period (April ... Sabka Vishwas Scheme (Legacy Dispute Resolution) Scheme 2019 - Discharge Certificate in form SVLDRS-4 was issued to the Petitioner - jurisdiction to issue the said SCN seeking payment of further duty - HELD THAT:- As per the provisions of Section 129 of the Sabka Vishwas Scheme, the Discharge Certificate issued to the Petitioner in Form SVLDRS-4 was conclusive in respect of the matter and time period contained therein i.e. from April, 2017 to June, 2017. Once the said Discharge Certificate in Form SVLDRS-4 was issued, the Petitioner was not liable to pay any further dues, interest or penalty with respect to the said period. Further, an assessment in respect of the matter and time period covered by the said Discharge Certificate could not be re-opened in any other proceedings under the Indirect Tax Enactment. In these circumstances, once the said Discharge Certificate in form SVLDRS-4 was issued to the Petitioner, Respondent No. 3 had no power or jurisdiction to issue the said Show Cause Notice dated 25th September, 2020, seeking payment of further duty or to pass the said Order-in-Original dated 30th November, 2021. The said Show Cause Notice has been issued, and the said Order has been passed, totally without jurisdiction. The said Show Cause Notice dated 25th September, 2020 and the said Order-in-Original dated 30th November, 2021 have been issued and passed totally contrary to the provisions of the Sabka Vishwas Scheme and totally without jurisdiction. For these reasons, they are required to be quashed and set aside. Petition allowed. Issues involved: The issues involved in this case include the application of the Sabka Vishwas Scheme, the validity of a Show Cause Notice, and the jurisdiction of the authorities in passing orders contrary to the Scheme.Application of Sabka Vishwas Scheme: The Petitioner, engaged in renting immovable property services, was registered under the Finance Act, 1994, paying service tax and filing returns. Respondent No. 3 initiated an investigation for the period April to June 2017, during which the Petitioner paid Rs. 45 lakhs in cash. Subsequently, the Petitioner declared its tax dues under the Sabka Vishwas Scheme, leading to the issuance of a Discharge Certificate. Despite this, Respondent No. 3 issued a Show Cause Notice demanding Rs. 3,66,95,172/-, including service tax, interest, and penalties.Validity of Show Cause Notice: The Petitioner, having availed of the Sabka Vishwas Scheme and obtained a Discharge Certificate, argued that the subsequent Show Cause Notice and Order-in-Original were issued without jurisdiction. The Order-in-Original demanded service tax, interest, and penalties, even though the Discharge Certificate had been issued under the Scheme, which should have concluded the matter and time period covered by it. The Court found that the issuance of the Show Cause Notice and the subsequent order were contrary to the provisions of the Scheme and lacked jurisdiction.Jurisdiction of Authorities: The Court held that the Discharge Certificate issued to the Petitioner was conclusive for the period in question, and no further dues, interest, or penalties were payable. The authorities had no power to demand additional payments once the Discharge Certificate was issued. The Court emphasized that allowing such actions would undermine the purpose of the Sabka Vishwas Scheme, which aims to resolve pending tax disputes. Consequently, the Court quashed the Show Cause Notice and the Order-in-Original, emphasizing that they were issued and passed without jurisdiction.Conclusion: In conclusion, the Court allowed the Petition, setting aside the Show Cause Notice and the Order-in-Original. The Court found that the actions of the authorities were contrary to the Sabka Vishwas Scheme and lacked jurisdiction. No costs were awarded in the case.