TaxTMI 
TaxTMI 
2021 (10) TMI 435
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.... pleaded are that the petitioner a propriety firm decided to take benefit of the Scheme, which was introduced to unload the baggage relating to legacy taxes viz Central Excise and Service Tax. The scheme is aimed to ensure that if conditions of scheme are fulfilled, it will be incumbent upon all officers and staff of respondent/department to partner with the trade and industry to make the scheme a grand success. The scheme has a potential to liquidate the huge outstanding litigation and free the tax payers from the burden of litigation and investigation under the legacy tax. The administrative machinery of government will also be able to fully focus on helping the tax payers in the smooth implementation of GST. 4. The petitioners averred that while filling the SVLDRS-1, application, they committed a mistake to mention under heading Return period as 2015-02 instead of April 2014 to June 2017 against the column the date on which return was filed, it was mentioned as 25.04.2015 instead of date of actual filling of each return for the period between April, 2014 to June, 2017. The said mistake occurred because the online system was not accepting so many entries. It is averred that th....
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....for the petitioners placed reliance on sub-rule-1 and sub-rule-3 of Rule 6 of the Sabka Vishwas (Legacy Dispute Resolution) Rules, 2019 to contend that the designated committee was under an obligation to issue a notice electronically to the petitioners and should have provided them a personal hearing. The respondent no.3 did not issue any SVLDRS-2 in respect of the declaration filed by the petitioners as per the provision of SVLDRS and mechanically rejected the declaration by putting a remark Incorrect application'. 10. It is categorically pleaded that the said information came to the knowledge of the petitioner only when they visited the portal after receipt of telephonic message from Oriental Bank of Commerce on 08.10.2020 regarding freezing of their account. The petitioners were under a bonafide impression that in the event their application is pregnant with any discrepancy, they will receive a message from the department and, in turn, they will rectify the same. 11. Learned counsel for the petitioner criticized the said rejection of application by contending :- 1. The decision of respondent runs contrary to the aim and object of the scheme. 2. Under ....
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....ion NO.7292/2020 decided on 06.07.2020) reported in 2020 (39) GSTL 388 (Guj), Nagen Hospitality Services Pvt. Ltd Vs. Central Board of Indirect Taxes and Customs reported in 2021(50) GSTL 518 (Ori) and Security and Intelligence services (India) Ltd Vs. Union of India reported in 2021(51) GSTL 28 (Ori.). 13. In addition, learned counsel for the petitioner has also filed note of submission/return submissions. 14. Countering the aforesaid arguments, Shri V.N Dubey, learned counsel for the respondents placed reliance on certain paras of the return. It is urged that a conjoint reading of section 127 of Finance (No.2) Act, 2019 and Rule 6(3) of SVLDRS Rules leaves no room for any doubt that where the amount estimated to be payable by the declarant exceeds the amount declared by him, the designated committee shall issue in electronical form the estimate of the amount payable by the declarant within 30 days of the date of declaration. The stand of respondent is that an opportunity of hearing is envisaged only in the case when the amount estimated for payment by the petitioners exceeds or if there is any disagreement between the amount estimated to be payable by the designated committ....
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....amount declared by the declarant, then the Designated Committee shall issue a statement in the prescribed electronic form indicating the amount payable by the declarant. Under sub section (2), where the amount estimated to be payable by the declarant as estimated by the Designated Committee exceeds the amount declared by the declarant, then the Designated Committee shall issue the estimate in the prescribed electronic form to the declarant informing him about the estimated amount. Under sub section (3), after the issue of estimate under sub section (2), the Designated Committee shall give an opportunity of being heard to the declarant and after hearing the declarant, the Designated Committee shall issue a statement in the prescribed form indicating the amount payable by the declarant. 23. From a conjoint reading of sub sections (1), (2) and (3) of section 127, the picture that emerges is that if the amount estimated by the Designated Committee is equal to the amount declared by the declarant, then the Designated Committee shall issue a statement in electronic form indicating the amount payable by the declarant. However, if the amount estimated by the Designated Committee i....
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....ent. It is clarified that such written communication will include a letter intimating duty demand; or duty liability admitted by the person during enquiry, investigation or audit; or audit report etc." 26.3. Clause (g) of paragraph 10 makes it abundantly clear that cases under an enquiry, investigation or audit where the duty demand has been quantified on or before 30.06.2019 would be eligible under the scheme. The word "quantified" has been defined under the scheme as a written communication of the amount of duty payable under the indirect tax enactment. In such circumstances, Board clarified that such written communication would include a letter intimating duty demand or duty liability admitted by the person during enquiry, investigation or audit etc. 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 ....
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....m 1 st 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 30 th 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." 30. There is one more reason which would justify our intervention in this case. We have already noticed that in a case where the amount estimated by the Designated Committee exceeds the amount declared by the declarant, then a hearing is given by the Designated Committee to the declarant before determining the amount to be paid by the declarant. In a situation where Designated Committee grants hearing to a declarant when the amount estimated by it exceeds the amount declared by the declarant, then it would be wholly inconceivable that before an application (declaration) is rejecte....
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....which should be kept in mind while considering a declaration seeking amnesty under the scheme. Therefore, a liberal view embedded with the principles of natural justice is called for. The approach should be to ensure that the scheme is successful." (emphasis supplied) 20. A plain reading of the aforesaid paragraphs makes it clear that the 'Scheme' is a beneficent one and aim and object of the 'Scheme' is to unload the baggage of pending litigation relating to service tax and excise duty. While interpreting a beneficent provision, its aim and object cannot be ignored. 21. Considering the aforesaid in Thought Blurb (supra), it was held that it will be completely illogical and contrary to the object of the 'Scheme' to reject an application on the ground of ineligibility without giving an opportunity to the declarant to explain as to why his declaration should not be accepted and why relief is not due to him. Thus, principles of natural justice were read into the provision by the Bombay High Court in all the aforesaid judgments. 22. Pertinently, the judgment of Elaf Tours and Travells (supra) were relating to 'arrears category' to which prese....