2024 (7) TMI 815 - HC - Service Tax

Gujarat HC allows late SVLDRS payment after designated authority wrongly rejected post-deadline application citing amendment restrictions

Gujarat HC allowed petition challenging rejection of SVLDRS application. Designated authority wrongly rejected petitioner's request to pay Rs. 77,80,000/- ... Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) - time limitation - request rejected on the ground that the time limit for payment has expired on 31.05.2020 - HELD THAT:- The designated authority cannot review its own order once an estimate is issued under Section 127 of the Act. Therefore, the order dated 06.05.2020 passed by the designated committee rejecting the application of the petitioner is contrary to the scheme of the SVLDRS. The petitioner by letter dated 26.06.2020 requested the designated committee to showing the willingness to pay the amount of Rs. 77,80,000/- as stated in Form SVLDRS-2. However, the designated committee by the order dated 30.06.2020 and 10.08.2020 rejected the request made by the petitioner to make the payment of Rs. 77,80,000/- on the ground that there is no facility to amend the Form SVLDRS-2 after 31.05.2020 as extended by the CBIC in view of the COVID-19 pandemic. This Court has also considered similar issue of permitting the assessee to grant the benefit of SVLDRS by directing the respondent authority to permit the petitioner to make the payment as per the Form SVLDRS-2 along with interest at the rate of 9% per annum in case of M/ S L.G. Chaudhari [2022 (10) TMI 631 - GUJARAT HIGH COURT]. The respondent authority is directed to permit the petitioner to make the payment of Rs. 77,80,000/- with interest at the rate of 9% from the due date of payment till the actual payment - Petition allowed. Issues Involved:1. Eligibility of the petitioner for the Sabka Vishwas (Legacy Dispute Resolution) Scheme (SVLDRS).2. Rejection of the petitioner's declaration by the designated committee.3. The petitioner's request to pay the amount specified in Form SVLDRS-2.4. The issuance of Form SVLDRS-3 and related procedural compliance.5. The petitioner's liability to pay interest on the amount due.Issue-wise Detailed Analysis:1. Eligibility of the Petitioner for SVLDRS:The petitioner, a company providing construction services, was subject to service tax under the Finance Act, 1994. The petitioner declared a service tax liability of Rs. 3,23,94,404 for the period from 01.04.2016 to 30.06.2016 and deposited Rs. 84,16,556 during the investigation. The petitioner filed a declaration under SVLDRS on 23.12.2019 and a revised declaration on 15.01.2020, declaring a net tax liability of Rs. 1,52,63,141. The designated committee issued Form SVLDRS-2 on 29.01.2020, estimating the amount payable as Rs. 77,80,647. The petitioner requested a hearing and submitted representations and documents to justify deductions and adjustments, claiming eligibility for the scheme.2. Rejection of the Petitioner's Declaration by the Designated Committee:The designated committee rejected the petitioner's declaration on 06.05.2020, stating there was no written communication of quantification of service tax amount payable on or before 30.06.2019. The petitioner submitted further representations requesting reconsideration, emphasizing that the amount was quantified before the specified date and that the committee had issued an estimate in Form SVLDRS-2. Despite this, the committee rejected the petitioner's request on 30.06.2020 and 10.08.2020, citing the expiration of the amendment facility for Form SVLDRS-2 on 31.05.2020.3. The Petitioner's Request to Pay the Amount Specified in Form SVLDRS-2:The petitioner argued that once the committee issued Form SVLDRS-2, it should not have re-examined the application. The petitioner cited Sections 126 and 127 of the SVLDRS, which outline the verification and estimation process, asserting that the committee should have allowed the petitioner to pay the specified amount. The petitioner also referred to the Bombay High Court's decision in Virtusa Systems (India) Private Limited vs. Union of India, which supported the petitioner's position that the designated committee cannot review its own order once an estimate is issued.4. The Issuance of Form SVLDRS-3 and Related Procedural Compliance:The petitioner contended that the designated committee should have issued Form SVLDRS-3 after the petitioner accepted the amount in Form SVLDRS-2. The designated committee's refusal to permit payment based on the expired amendment facility was deemed contrary to the SVLDRS provisions. The Bombay High Court's decision in Virtusa Systems (India) Private Limited was cited, emphasizing that the committee should have issued Form SVLDRS-3 and allowed the petitioner to make the payment.5. The Petitioner's Liability to Pay Interest on the Amount Due:The petitioner expressed willingness to pay interest on the amount due from the date of acceptance until the actual payment. The court referenced the Bombay High Court's decision, which allowed the petitioner to deposit the eligible amount with interest at 9% per annum. The court concluded that the petitioner was entitled to the relief sought, including the payment of Rs. 77,80,000 with interest and the issuance of Form SVLDRS-3.Conclusion:The court allowed the petition, directing the respondent authority to permit the petitioner to pay Rs. 77,80,000 with interest at 9% per annum from the due date until actual payment. The respondent authority was also directed to issue Form SVLDRS-3, and as a consequence, the impugned Order in Original and the show cause notice were set aside. The rule was made absolute to the stated extent, with no order as to costs.