TaxTMI 
TaxTMI 
2021 (2) TMI 236
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....ated that respondent No.3 i.e. Director General of Central Excise Intelligence, Mumbai Zonal Unit had initiated investigation against the petitioner for alleged short payment of service tax for the period from April, 2015 to March, 2017. According to the petitioner, it had paid an amount of Rs. 6,88,28,562.00 in cash besides having cenvat credit of Rs. 4,46,26,170.00; thus, making total payment of Rs. 11,34,54,732.00. 5. When the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (briefly "the scheme" hereinafter) was introduced, petitioner submitted declaration under the "investigation, enquiry or audit" category on 30th December, 2019. Besides mentioning the service tax dues at Rs. 11,70,21,529.00, it was also mentioned that an amount of Rs. 11,34,54,732.00 was paid as pre-deposit. Therefore, tax dues to be paid under the scheme after adjustment of the tax reliefs would be "Nil". 6. By order dated 10th February, 2020, the Designated Committee rejected the said declaration on the ground of ineligibility with the remark that "investigation was still going on as per DGGI report". 7. Aggrieved, present writ petition has been filed. 8. Respondents in their common reply....
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....te of 30th June, 2019. That being the position, respondents could not have declared the petitioner as ineligible to file the petition under the scheme. Therefore, such rejection of declaration of the petitioner is illegal and is liable to be set aside and quashed. 10. On the other hand, Mr.Jetly, learned senior counsel appearing for the respondents submits that only upon issuance of show cause notice dated 2nd November, 2020 can it be said that the service tax dues of the petitioner stood quantified at Rs. 17,52,70,590.00. This according to him being beyond the cut off date of 30th June, 2019 would render the petitioner ineligible to make a declaration under the scheme under the category of investigation, enquiry or audit. Statements made by the Director of the petitioner admitting certain service tax liability cannot be construed to be quantification of the service tax dues because that stage was reached only upon issuance of show cause notice dated 2nd November, 2020 which is after the cut off date i.e. after 30th June, 2019. Therefore, no interference is called for. 11. Submissions made by learned counsel for the parties have been duly considered. 12. Issue raised in th....
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.... tax liability for an amount of Rs. 10,74,011.00 which again is before the cut off date of 30th June, 2019. Thus, petitioner's tax dues were quantified on or before 30th June, 2019. 50. In that view of the matter, we have no hesitation to hold that petitioner was eligible to file the application (declaration) as per the scheme under the category of enquiry or investigation or audit whose tax dues stood quantified on or before 30th June, 2019." 14. Subsequently, in M/s G.R. Palle Electricals Vs. Union of India, 2020-TIOL-2031-HC-MUM-ST, this court held as follows:- "27. We have already noticed that proprietor of the petitioner in his statement recorded on 11.01.2018 by the investigating authority admitted the service tax liability of Rs. 60 lakhs (approximately) to be outstanding for the period from 2015-2016 to June, 2017. This was corroborated by the departmental authority in the letter dated 24.01.2018 which we have already noted and discussed. Therefore, present is a case where there is acknowledgment by the petitioner of the duty liability as well as by the department in its communication to the petitioner. Thus, it can be said that in the case of the petit....
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....nd or duty liability admitted by the person during enquiry, investigation or audit etc. 23. Reverting back to the facts of the present case we find that there is clear admission / acknowledgment by the petitioner about the service tax liability. The acknowledgment is dated 27.06.2019 i.e., before 30.06.2019 both in the form of letter by the petitioner as well as statement of its Director, Shri. Sanjay R. Shirke. In fact, 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. * * * * * * * * 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 crys....
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.... declarant in the specified form about the estimate determined by the Designated Committee which is required to be paid by the declarant. However, before insisting on payment of the excess amount or the higher amount the Designated Committee is required to give an opportunity of hearing to the declarant. In a situation when the amount estimated by the Designated Committee is in excess of the amount declared by the declarant an opportunity of hearing is required to be given by the Designated Committee to the declarant, then it would be in complete defiance of logic and contrary to the very object of the scheme to outrightly reject an application (declaration) on the ground of being ineligible without giving a chance to the declarant to explain as to why his application (declaration) should be accepted and relief under the scheme should be extended to him. Summary rejection of an application without affording any opportunity of hearing to the declarant would be in violation of the principles of natural justice. Rejection of application (declaration) will lead to adverse civil consequences for the declarant as he would have to face the consequences of enquiry or investigation or audit....