2024 (8) TMI 613 - HC - Service Tax

Petition allowed challenging SVLDRS declaration rejection as tax dues were quantified before cutoff date

Eka Academy Private Limited Versus Union of India, The Chairman Central Board of Indirect Taxes and Customs, Department of Revenue, Ministry of Finance, New Delhi, The Commissioner Central GST Commissionerate, Raigad, The Joint Commissioner SVLDRS Cell, Central GST Commissionerate, Raigad, The Assistant Commissioner, Central GST Commissionerate, Raigad.

The Bombay HC allowed a petition challenging rejection of declaration under SVLDRS. The respondents had rejected the declaration claiming tax dues were ... Rejection of declaration under Sabka Vishwas Legacy Dispute Resolution Scheme (SVLDRS) - rejection on the ground that as per respondents' records the tax dues had not been quantified before 30th June 2019 and hence, it is not covered under the investigation category - HELD THAT:- The amount payable has been quantified before 30th June 2019. In the circumstances, respondents shall constitute a Committee to decide the declaration that was filed by petitioner on 30th December 2019 and, on or before 30th September 2024, dispose the same in accordance with law. The show cause notice dated 21st September 2021 issued to petitioner is also quashed and set aside. Accordingly, impugned orders dated 18th August 2021 and 31st March 2022 are also quashed and set aside. Consequently, the appeal filed by petitioner before the Central Excise Service Tax Appellate Tribunal (CESTAT) being Appeal No.86611 of 2022 filed on 4th July 2022 also stands disposed. Petition disposed off. Issues:1. Interpretation of the Sabka Vishwas Legacy Dispute Resolution Scheme (SVLDRS) regarding quantification of tax dues before the cut-off date.2. Rejection of petitioner's declaration under SVLDRS by respondents.3. Comparison of relevant case laws to determine the applicability of quantification of tax liability.4. Disposal of the petition and related show cause notice and orders.Analysis:Issue 1: Interpretation of SVLDRS regarding quantification of tax dues before the cut-off dateThe petitioner received an email from the GST audit team regarding a service tax mismatch and was directed to produce documents. Despite a minimal difference of only Rs. 1, the petitioner opted to pay a significant sum of Rs. 22,00,414 as service tax for multiple financial years. The petitioner utilized the SVLDRS by filing declarations under different categories, initially declaring Rs. 16,04,367 and later Rs. 22,00,414 as the quantified amount. The respondents rejected the latter declaration, citing ineligibility as the tax dues were not quantified before June 30, 2019, as required by the scheme.Issue 2: Rejection of petitioner's declaration under SVLDRSThe rejection was based on the grounds that the tax dues were not quantified before the specified date, rendering the declaration ineligible. The rejection remarks highlighted the statutory provisions that govern the scheme and the conditions for granting relief. The petitioner's argument relied on a judgment that emphasized quantification before the cut-off date, while the respondents cited a different judgment to support their position that unilateral communication does not suffice for quantification.Issue 3: Comparison of relevant case lawsThe court analyzed previous judgments to determine their applicability to the present case. It differentiated the facts of those cases from the petitioner's situation, emphasizing that the petitioner had admitted the tax liability explicitly and the respondents had requested payment based on this admission. The court highlighted the importance of quantification before the cut-off date in line with the scheme's objectives of resolving legacy disputes and ensuring tax disclosure.Issue 4: Disposal of the petition and related ordersIn the final judgment, the court set aside the rejection of the petitioner's declaration and directed the formation of a committee to decide on the declaration filed. The show cause notice and subsequent orders were quashed and the appeal before the Central Excise Service Tax Appellate Tribunal was disposed of. The petitioner was instructed to inform the tribunal about the judgment within a specified timeframe.This detailed analysis of the judgment showcases the court's interpretation of the SVLDRS, the rejection of the petitioner's declaration, the comparison with relevant case laws, and the final disposal of the petition and related matters.