2020 (12) TMI 318

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....corporated under the Companies Act, 1956 having its registered office at Mumbai. Earlier, it had service tax registration for providing security / detective agency services and presently it has Goods and Services Tax (GST) registration. 4. A summons dated 19.06.2019 / 20.06.2019 was issued to the petitioner by the Senior Intelligence Officer in the Directorate General of Goods and Services Tax (GST) Intelligence, Mumbai Zonal Unit, Mumbai. It was mentioned therein that a case / inquiry regarding evasion of service tax was being conducted by the said officer under the Finance Act, 1994 read with section 174 of the Central Goods and Services Tax Act, 2017 (briefly 'the CGST Act' hereinafter). Senior Intelligence Officer mentioned that he had reasons to believe that petitioner was in possession of facts, documents and things relevant for the said inquiry pertaining to the period prior to GST i.e., prior to 01.07.2017. Accordingly, petitioner was summoned to appear before the said authority on 27.06.2019. 5. Petitioner wrote to the said Senior Intelligence Officer vide letter dated 27.06.2019 in reference to the summons dated 20.06.2019. After giving year-wise service tax break-u....

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....n under the aforesaid category could be filed where the amount of duty payable had been quantified on or before 30.06.2019. However, Directorate General of GST Intelligence (DGGI) vide letter dated 24.01.2020 had informed that final quantification in the case of the petitioner had not been done before 30.06.2019. Therefore, the declaration fell under the exception clause of section 125(1)(e) of Chapter V of Finance (No.2) Act, 2019. Observing that the declaration of the petitioner was liable for rejection, a personal hearing of the petitioner was fixed before the Designated Committee on 07.02.2020. 9. Personal hearing was granted as above. Petitioner relied upon circular dated 27.08.2019 of the Central Board of Indirect Taxes and Customs (briefly 'the Board' hereinafter) and submitted that its declaration was valid. 9.1. However, by the impugned order dated 01.03.2020 generated on 03.03.2020, the declaration of the petitioner was rejected on the ground of ineligibility. In the remarks given, it was mentioned that DGGI, Mumbai Zonal Unit in its verification report dated 25.01.2020 had informed that final quantification was not done before 30.06.2019. Thus, case of the petition....

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....nd reasonable opportunity of hearing was granted to the petitioner. There is no merit in the writ petition which should therefore be dismissed. 13. Learned counsel for the petitioner has referred to various provisions of the scheme as well as to the circular dated 27.08.2019 of the Board. Thereafter he submits that impugned decision of the respondents in rejecting the declaration of the petitioner is wholly untenable in law as well as on facts. He submits that petitioner in its letter dated 27.06.2019 as well as the Director of the petitioner in his statement recorded on 27.06.2019 well before the cut off date of 30.06.2019 had clearly admitted that service tax liability of the petitioner for the period in question was Rs. 2,47,32,456.00 out of which an amount of Rs. 1,20,60,000.00 was paid. Therefore, the declaration of the petitioner under the 'pending investigation, enquiry or audit category' was clearly maintainable. 14. On the other hand, Mr. Jetly submits that under section 125(1)(e) of the Finance (No.2) Act, 2019, petitioner was not eligible to make a declaration as the outstanding amount due to be paid by the petitioner was not determined upon adjudication on or befo....

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....n 125. 20. Section 127 deals with estimation by the Designated Committee of the amount payable by the declarant and the procedure to be followed. Once the determined amount is paid by the declarant, discharge certificate is issued by the Designated Committee under sub-section (8) of section 127. 21. Respondents have relied upon section 125(1)(e) to contend that a person who has been subjected to an enquiry or investigation or audit and the amount of duty involved in the said enquiry or investigation or audit had not been quantified on or before 30.06.2019 would not be eligible to make the declaration. On this ground, declaration of the petitioner has been rejected by the Designated Committee, which has been justified by the respondents in their affidavit. 22. In the circular dated 27.08.2019 relied upon by learned counsel for the petitioner, Board had issued instructions clarifying certain issues pertaining to the scheme. Clause (a) of paragraph 4 is relevant and is extracted hereunder :- "4. The relief extended under this Scheme is summed up, as follows: (a) For all the cases pending in adjudication or appeal (at any forum), the relief is to the extent o....

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....on a pointed query by the Senior Intelligence Officer as to whether petitioner accepted and admitted the revised service tax liability of Rs. 2,47,32,456.00, the Director in his statement had clearly admitted and accepted the said amount as the service tax liability for the period from 2015-16 upto June, 2017 with further clarification that an amount of Rs. 1,20,60,000.00 was already paid. 24. This aspect of the matter was gone into in considerable detail by us in Thought Blurb Vs. Union of India, decided on 27.10.2020, whereafter in the facts of that case it was held as under :- "49. Reverting back to the facts of the present case, we find that on the one hand there is a letter of respondent No.3 to the petitioner quantifying the service tax liability for the period 1st April, 2016 to 31st March, 2017 at Rs. 47,44,937.00 which quantification is before the cut off date of 30th June, 2019 and on the other hand for the second period i.e. from 1st April, 2017 to 30th June, 2017 there is a letter dated 18th June, 2019 of the petitioner addressed to respondent No.3 admitting service tax liability for an amount of Rs. 10,74,011.00 which again is before the cut off date of 30t....

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....) of Circular No 1071/4/2019-CX dated 27th August, 2019]." * * * * "Q45. With respect to cases under enquiry, investigation or audit what is meant by 'written communication' quantifying demand ? Ans. Written communication will include a letter intimating duty/tax demand or duty/tax liability admitted by the person during enquiry, investigation or audit or audit report etc." 26. Following the above it is evident that the word 'quantified' under the scheme would mean a written communication of the amount of duty payable which will include a letter intimating duty demand or duty liability admitted by the person concerned during enquiry, investigation or audit or audit report and not necessarily the amount crystalized following adjudication. Thus, petitioner was eligible to file the declaration in terms of the scheme under the category of enquiry or investigation or audit as its service tax dues stood quantified before 30.06.2019. 27. As has been held by us in Thought Blurb (supra), the scheme is a beneficial one with the prime object of unloading the baggage of pending litigations centering around service tax and excise duty. The focus is to unload thi....