2024 (12) TMI 224 - HC - Service Tax

Court Orders Reassessment of Tax Application Due to Lack of Evidence in Online Communication Process.

M/s. Sagoon Security Services Pvt. Ltd. Versus Union of India, Directorate General of GST Intelligence, Mumbai, The Principal Commissioner GST & Central Excise, Mumbai, The Designated Committee, Mumbai, Central Board of Indirect Taxes & Customs, New Delhi.

The Court concluded that the respondents failed to justify the non-consideration of the petitioner's application under the SVLDRS Scheme due to the lack ... Non-consideration of petitioner's application filed on 26 December 2019 - petitioner submits that since the petitioner did not receive SVLDRS Form-3 from the respondents, they did not make any payment in the scheme and therefore, the respondents are not justified in not considering the application of the petitioner - HELD THAT:- It is not disputed that the scheme is fully regulated by online mode. The respondents have also not disputed receipt of SVLDRS Form-1. However, the respondent has not produced any evidence, positive or otherwise, to show that SVLDRS Form-3 was intimated to the petitioner online, either by E-mail or otherwise. If the scheme is regulated online, it cannot be accepted that there would be no proof that the respondents issued SVLDRS Form-3 and that the petitioner received it. The petitioner is justified in contending that they could not be called upon to prove negative. Still, on the contrary, the onus lies on the respondents to show that SVLDRS Form-3 was intimated to the petitioner. The respondents were not justified in not considering the petitioner's application filed on 26 December 2019. After February 2020, on account of the pandemic, the petitioner could not approach the respondents. As soon as COVID-19 restrictions were relaxed, they followed up with the respondents sparingly on the issue. Even today, respondents have not produced SVLDRS Form-3. The petitioner is justified in relying upon the decision of this court in the case of M/S. YOUR FITNESS CLUB PVT. LTD. VERSUS THE UNION OF INDIA & ORS. [2022 (7) TMI 233 - BOMBAY HIGH COURT] which involved similar if not identical facts. This Court directed the petitioner's application therein to be considered by the respondents for the purpose of SVLDRS Scheme - the said decision squarely applies to the facts of the present petition, and therefore, the respondents' non-consideration of the petitioner’s application is not justified. The respondents are directed to consider the application of the petitioner dated 26 December 2019 within the period of 4 weeks from the date of uploading of the present order and inform the petitioner about the amount payable under the Scheme - Petition allowed. Issues:1. Petitioner seeking writ of Certiorari and Mandamus to challenge communication and seek acceptance of declaration under SVLDRS Scheme.2. Dispute regarding non-receipt of SVLDRS Form-3 by the petitioner.3. Justification of respondents' decision in not considering petitioner's application.4. Application of precedent in a similar case involving SVLDRS Scheme.Analysis:The petitioner, engaged in Outdoor Catering Services, sought relief under the SVLDRS Scheme for unpaid service tax liability from October 2016-September 2017. Despite filing Form-1 and seeking rectification, the petitioner claimed non-receipt of SVLDRS Form-3 intimating payment due. The respondents contended that the scheme was online and deemed receipt should be assumed. The Court noted the online nature of the scheme but emphasized the lack of evidence proving communication of Form-3 to the petitioner.The Court held that the burden lay on the respondents to demonstrate communication of Form-3 to the petitioner, especially in an online system. Citing a prior judgment with similar circumstances, the Court directed the respondents to consider the petitioner's application within four weeks and inform about the payable amount. The petitioner was instructed to make the payment within four weeks of communication, following which the respondents were to issue a discharge certificate under the SVLDRS Scheme.The Court found the respondents' non-consideration of the petitioner's application unjustified and ordered compliance with the above directives. The judgment highlighted the importance of proving communication in an online scheme and upheld the petitioner's right to have their application reviewed under the SVLDRS Scheme.This comprehensive analysis covers the issues raised in the judgment, including the petitioner's claims, the respondents' submissions, the Court's assessment of the situation, and the final directives issued to resolve the dispute effectively.