TaxTMI 
TaxTMI 
2021 (2) TMI 515
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....econsider the declaration of the petitioner dated 24.12.2019 in terms of the scheme and grant the reliefs to the petitioner. 3. According to the petitioner, he is the sole proprietor of the proprietorship firm M/s. Finbros Marketing having its office at Thane (West). Petitioner is engaged in the business of facilitating distribution of personal loan in Mumbai and is associated with various banks and financial institutions. Being a service provider, it was registered as such under Chapter V of the Finance Act, 1994. 4. It is stated that an inquiry was initiated by the Senior Intelligence Officer of Directorate General of GST Intelligence (DGGI), Pune Zonal Unit against the petitioner for alleged non-payment of service tax dues during the period from 2013-14 to 2017-18 (upto June, 2017). 5. In this connection, summons dated 28.05.2018 under section 14 of the Central Excise Act, 1944 was issued to the petitioner. Responding to the summons, petitioner appeared before the Senior Intelligence Officer and his statement was recorded on oath by the said officer on 06.07.2018. In his statement, petitioner admitted that the total service tax liability for the period under considerati....
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....ed that after completion of investigation, show cause-cum-demand notice dated 11.11.2019 was issued to the petitioner alleging that petitioner had not paid service tax amount to Rs. 2,17,97,355.00 for the period from 2014-15 to June, 2017. Petitioner had filed declaration in terms of the scheme under the category of investigation, inquiry or audit disclosing outstanding service tax dues of Rs. 2,17,97,355.00. Petitioner's declaration was rejected on 31.01.2020 on the ground of ineligibility since the final amount came to be quantified after 30.06.2019 i.e., on 11.11.2019 when the show cause-cum- demand notice was issued. In this connection, reference has been made to section 125 of the Finance (No.2) Act, 2019 whereafter it is contended that it was only on issuance of show-cause notice dated 11.11.2019 that the outstanding service tax dues stood quantified. This being post 30.06.2019, petitioner was clearly ineligible to make the declaration under the said category. 13.1. As a matter of fact, designated committee i.e. respondent No.1 had called for a verification report from DGGI, Pune to verify correctness of the claim of the petitioner. Based on the verification report ....
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....ly considered. 17. Issue raised in the present writ petition i.e. eligibility of the petitioner or maintainability of his declaration to avail the benefits of the scheme under the category of investigation, enquiry or audit on the ground that quantification of the service tax dues of the petitioner for the related period was not quantified on or before 30th June, 2019 is no longer res-integra. 18. In Thought Blurb Vs. Union of India, 2020-TIOL-1813-HCBGP. MUM-ST, this court faced with a similar issue referred to provisions of the Finance (No.2) Act, 2019 and to the circular dated 27th August, 2019 of the Central Board of Indirect Taxes and Customs (briefly "the Board" hereinafter) whereafter it was held as under :- "47. Reverting back to the circular dated 27th August, 2019 of the Board, it is seen that certain clarifications were issued on various issues in the context of the scheme and the rules made thereunder. As per paragraph 10(g) of the said circular, the following issue was clarified in the context of the various provisions of the Finance (No.2) Act 2019 and the Rules made thereunder :- Cases under an enquiry, investigation or audit where the duty demand has ....
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....mmunication to the petitioner. Thus, it can be said that in the case of the petitioner the amount of duty involved had been quantified on or before 30.06.2019. In such circumstances, rejection of the application (declaration) of the petitioner on the ground of being ineligible with the remark that investigation was still going on and the duty amount was pending for quantification would not be justified. 28. This position has also been explained by the department itself in the form of frequently asked questions (FAQs). Question Nos.3 and 45 and the answers provided thereto are relevant and those are reproduced hereunder :- "Q3. If an enquiry or investigation or audit has started but the tax dues have not been quantified whether the person is eligible to opt for the Scheme? Ans. No. If an audit, enquiry or investigation has started, and the amount of duty/duty payable has not been quantified on or before 30th June, 2019, the person shall not be eligible to opt for the Scheme under the enquiry or investigation or audit category. 'Quantified' means a written communication of the amount of duty payable under the indirect tax enactment [Section 121(r)]. Such wr....
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....on 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." 21. From the above it is evident that all that would be required for being eligible under the above category is a written communication which will mean a written communication of the amount of duty payable including a letter intimating duty demand or duty liability admitted by the person concerned during inquiry, investigation or audit. For eligibility under the scheme, the quantification need not be on completion of investigation by issuing show-cause notice or the amount that may be determined upon adjudication. 22. In so far the present case is concerned, we may refer to the first statement of the petitioner recorded on 06.07.2018. In this statement, he categorically admitted that the total service tax liability of the petitioner for the period 2013-14 to 2017-18 (upto June, 2017) would be around Rs. 1.93 crores. While petitioner did not give the exact figure of total service tax dues, he ....
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....d 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. As has been held by us i....