2024 (10) TMI 1133 - HC - Service Tax

Petitioner eligible for Sabka Vishwas Scheme despite pending penalty show cause notice on cut-off date

Ultratech Cement Ltd. Versus Union of India & Ors.

Gujarat HC allowed petitioner's writ petition challenging rejection of SVLDRS-1 form under Sabka Vishwas Scheme 2019. Revenue authorities rejected ... Rejection of declaration in Form SVLDRS-1 filed by the petitioner under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) - rejection on the ground that the petitioner was not eligible to avail the Scheme as there is no quantification of Rs. 20,72,31,044/- stated by the petitioner in the Form for proposed such levy in the show cause notice - HELD THAT:- It is not in dispute that the show cause notice was pending adjudication when the scheme was introduced as on 30.06.2019, which was cut-off date as per the SVLDRS. The show cause notice was for the levy of penalty amounting to Rs. 20,72,31,044/-, as stated in Para-12 of the show cause notice dated 25.02.2019. The scheme is applicable to any show cause notice for penalty/late fee, irrespective of whether it is under adjudication or appeal. The case of the petitioner therefore would squarely fall in the eligible cases and merely because the petitioner has shown the amount of proposed penalty mentioned in the show cause notice would not make the declaration made by the petitioner as eligible under the Scheme. The impugned order dated 18.03.2020 passed by respondent No. 2 is hereby quashed and set aside. The matter is remanded back to the respondent authorities to adjudicate the Form SVLDRS-1 in accordance with law as it is not in dispute that the show cause notice for penalty was pending adjudication as on 30.06.2019. Petition allowed by way of remand. Issues:Challenge to rejection of declaration under SVLDRS-1 by respondent due to lack of quantification of penalty amount in show cause notice.Analysis:The petitioner challenged the rejection of their declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) by the respondent, contending that they were eligible as the show cause notice proposed a penalty amount. The respondent rejected the declaration on the basis that the penalty amount was not quantified in the notice, rendering the declaration void.The respondent issued a show cause notice proposing a penalty under the Cenvat Credit Rules, 2004. When the SVLDRS was introduced, the petitioner filed a declaration under the Scheme. The respondent informed the petitioner that the declaration was void due to the lack of quantification of penalty in the show cause notice.The Designated Committee rejected the petitioner's declaration without a proper hearing. The petitioner requested an adjournment for a personal hearing, which was denied. Subsequently, the petitioner's declaration was rejected, and their request for a personal hearing was also declined.The petitioner argued that they were eligible under the SVLDRS as the show cause notice quantified the penalty amount. They referred to the Scheme's provisions and FAQs to support their eligibility claim. The respondent, however, contended that the declaration was incorrect as the penalty amount was declared in the declaration but not yet adjudicated upon.The Court found that the show cause notice was pending adjudication when the SVLDRS was introduced, making the petitioner eligible under the Scheme. The Court held that the scheme applied to any show cause notice for penalty/late fee, regardless of adjudication status. The rejection of the petitioner's declaration was quashed, and the matter was remanded back to the authorities for adjudication in accordance with the law.The Court directed the authorities to issue Form SVLDRS-4 within 12 weeks. The petition was allowed, and no costs were awarded.