TaxTMI 
TaxTMI 
TaxTMI 
2022 (1) TMI 867
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....the order of Designated Committee-I (comprised of respondent nos. 2 and 3) communicated through email dated 14th February, 2020 whereby rejecting the SVLDRS-1 Declaration dated 30th December, 2019 filed by the petitioner. The petitioner also prays that the proviso to Rule 6(2) read with Rule 6(3) of the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 (for short 'the said Scheme') be read down and to accept the Declaration filed by the petitioner as the valid Declaration under Section 125 of the said Scheme and for other reliefs. 3. Some of the relevant facts for the purpose of deciding this writ petition are as under :- 4. The petitioner is engaged in providing construction services of commercial or industrial buildings and civil structures, other than residential complexes. It is the case of the petitioner that in the month of February 2019, an enquiry for investigation was narrated by the Directorate General of GST Intelligence, Zonal Unit, Mumbai. During the course of the investigation, the petitioner submitted copies of the documents for the period 2013-14 (from October 2013 to March 2014), 2014-15, 2015-16 and 2016-17 (from April to June 2017), on demand, to the....
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....m of Rs. 90 lakhs i.e. sum of Rs. 25,55,729/- in the excess of the final amount payable by the petitioner which amount is non-refundable under the said Scheme. 8. The petitioner made a representation before the respondent no.2 on 31st January, 2020 and gave a detailed explanation as to why the said Declaration filed by the petitioner on 30th December, 2019 should be accepted. The petitioner requested for an opportunity of personal hearing in compliance with the principles of natural justice, if the respondent no.2 did not agree to the said submissions made by the petitioner in the said representation before deciding the said issue. 9. The petitioner was communicated with the decision vide email dated 14th February, 2020 by the respondent no.2 thereby rejecting the said Declaration filed by the petitioner dated 30th December, 2019 without providing an opportunity of Personal hearing. The petitioner made another representation on 16th March, 2020 to the respondent no.2 requesting to provide an opportunity of personal hearing. The said request was however rejected by the respondent no.2 vide letter dated 10th August, 2020. 10. On 10th August, 2020, the respondent no.2 notified the ....
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.... 30th June, 2019 and thus Section 121(r) defining the terms 'quantified' under the said Scheme was satisfied. 13. Learned counsel for the petitioner invited our attention to 'Frequently Asked Questions (FAQs) issued by the Central Government under the said Scheme and more particularly answer to question no. 53. He submits that the said answer to said question no. 53 is contrary to the provisions of the said Scheme including the clarifications already issued by circular dated 27th August, 2019. It is submitted that in any event, the modified amount of the tax dues even according to the respondents was less than the amount admitted and quantified by the petitioner during the course of recording the statement by the Investigating Officer. Learned counsel for the petitioner placed reliance on the following judgments :- (a) The Judgment of this Court in case of Saksham Facility Services Pvt. Ltd. v/s. Union of India, 2021 (47) G.S.T.L. 228 (Bom.). (b) The Judgment of this Court in case of Viztar International Pvt. Ltd. v/s. Union of India, 2021 (47) G.S.T.L. 341 (Bom.). (c) An unreported Judgment of this Court in case of M/s. G. R. Palle Electricals v/s. Union of India & Ors. in ....
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....nd invited our attention to the impugned order dated 14th February, 2020 rejecting the said Declaration form submitted by the petitioner. He relied upon the communication dated 10th August, 2020 recording the reasons for rejection of the said Declaration form submitted by the petitioner. He submits that the petitioner was clearly informed that the investigation was still going on and the respondents were yet to quantify the tax liability, thus the amount admitted in the statement cannot be said to be final. He submits that the Designated-I Committee had sought clarification from the DGGI, Mumbai in which it was once again reported that the investigation was still going on and that they were yet to quantify the liability and hence the amount admitted in the statement could not be said to be final. Learned senior counsel placed reliance on Section 121 of the said Scheme and more particularly the definition of 'quantified' defined under Section 121(r). He relied upon Section 123 of the said Scheme which provides as to what the 'tax dues' means for the purpose of the said Scheme. He relied upon Section 123(c) in support of the submission that where an enquiry or investigation or audit ....
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.... view of the fact that the tax liabilities already having been quantified, the petitioner was eligible to apply under the said Scheme. 23. Learned counsel for the petitioner invited our attention to the averments made in paragraph 14 of the said affidavit-in-reply filed by the respondents admitting that the amount in the Declaration form filed by the petitioner and in the show-cause notice was different. The amount quantified by the respondents in the show-cause notice showed the amount lesser than the amount admitted and quantified by the petitioner. The Court has to take liberal view in the matter under the said Scheme. The stand taken by the respondents is totally against the object, purpose and the intent of the said Scheme. 24. It is submitted by the learned counsel for the petitioner that under section 125(1) of the said scheme, the categories of persons who are eligible to make Declarations under the said scheme are provided. Under section 125 (1)(e) of the said scheme, the persons who have been subjected to an enquiry or investigation or audit and the amount of duty involved in the said enquiry of investigation or audit has not been quantified on or before the 30th June, ....
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....show cause notice dated 26th September, 2020. He submits that since the amount reflected in the show cause notice was lesser than the admitted amount in the statement made by the director of the petitioner, the benefit under the said scheme cannot be denied to the extent, amount admitted in the statement. 28. It is submitted that the stand taken by the respondents in the affidavit in reply and more particularly in paragraph 4 that the respondent no.3 had conveyed to the respondent no.2 about the on going investigation and that the investigation was pending vide letter dated 14th February, 2020 is incorrect. The said information was conveyed on 10th August, 2020 and not 14th February, 2020. On 14th February, 2020, the application of the petitioner was already rejected by the respondents. 29. Learned counsel for the petitioner invited our attention to a judgment delivered by a Division Bench of this Court in case of JSW Steel Limited (supra) and distinguished the said judgment on the ground that the petitioner before this Court in the said judgment did not admit the liability whereas the liability was declared, admitted and quantified by way of statement of Mohd.Azhar Ali, who was ....
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.... held that the decision of the respondents in declaring the petitioner as ineligible is unjustified. REASONS AND CONCLUSION : 33. It is not in dispute that pursuant to the summons issued on 15th November, 2019 investigation was initiated against the petitioner by DGGI Mumbai. In pursuance to the said summons, statement of Mohd. Azhar Ali, director was recorded on 28th February, 2019. A perusal of the said statement of the said director recorded on 28th February, 2019 by the Senior Intelligence Officer, DGGI, Mumbai, Zonal Unit clearly indicates that the said director on behalf of the petitioner, had stated that it was his responsibility to give true and correct statement. The said enquiry was deemed to be a judicial proceeding within the meaning of section 193 and 228 of the Indian Penal Code, according to which using false and fabricated statements in the proceedings with an intention is an offence punishable under section 193 of the Indian Penal Code. He also admitted that he had understood that his statement would be binding on him and the petitioner and the same could be used as evidence. 34. The said director of the petitioner in reply to question 9, 'whether he knew what w....
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....ade by the petitioner through its director during the course of investigation carried out by the respondents against the petitioner. In the show cause - cum - notice dated 26th September, 2020 i.e. much after rejection of the said Declaration filed by the petitioner under the said scheme, it was also recorded that the said Mohd.Azhar Ali (Director) of the petitioner was called upon to appear before the Senior Intelligence Officer on 28th February, 2019 to tender the evidence by way of statement. The petitioner had submitted the copies of the income tax returns of various periods and also copies of service tax returns. In paragraph 3.3 of the show cause notice, a reference was made to the statement made by the said director on 28th February, 2019. It is clearly stated in the show cause notice that the petitioner had admitted the service tax liability of Rs. 1,28,88,541/- for the period from October, 2013 to June, 2017 and that their profit and loss account figures were inclusive of service tax. 37. A perusal of the affidavit in reply filed by the respondents in this writ petition more particularly in paragraph 5 indicates that the respondents have admitted that in the statement rec....
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....personal hearing. If personal hearing would have been rendered to the petitioner, it could have pointed out admission of the quantification of tax dues of the petitioner during the course of recording statement of the director by the investigating officer and not disputed by the respondents. 42. In our view, rejection of the Declaration under the said scheme filed by the petitioner without rendering a personal hearing to the petitioner, leads to adverse civil consequences for the petitioner as the petitioner would have to face the consequences of enquiry or investigation or audit. The impugned orders are in gross violation of the principles of law laid down by this Court in the case of Thought Blurb (supra) would apply to the facts of this case. We do not propose to take a different view in the matter. Karnataka High Court in case of M/s.Kiran Borewells (supra) has taken the same view as taken by this Court in case of Thought Blurb (supra). We are in respectful agreement with the view taken by the Karnataka High Court in case of M/s.Kiran Borewells (supra). 43. Similar view is taken by the Delhi High Court in case Seventh Plane Networks Limited vs. Union of India (supra) relied u....
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....eme clearly states that even if the amount quantified under enquiry, investigation or audit before 30th June, 2019 gets modified subsequently due to any such assessee, he/she shall be entitled to file a Declaration under the said SVLDR scheme. In our view, conjoint reading of the term "quantified" used in section 125(1) read with clause clause (e) of the said scheme and paragraph 4(a) and 10(g) of the circular dated 27th August, 2019 issued by CBIC makes it clear that even if the tax dues are admitted in the statement made by the assessee on or before 30th June, 2019, it would satisfy the term "quantified" within the meaning of clause (r) of section 121 of the said SVLDR scheme. The respondents in this case have clearly admitted that the petitioner had admitted the said tax dues in the statement made by the petitioner through its director on or before 30th June, 2019 before the investigating officer. The circular issued by CBIC clarifying the term "quantified" is binding on the respondents. 49. A perusal of the Declaration form filed by the petitioner indicates that the petitioner had claimed the relief in tax dues, interest and penalty under the category (Investigation or Enquiry....
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....e service tax on Ocean Freight on which the petitioner claimed exemption. 52. This Court held that when there is provision of granting personal hearing in a case where the declarant disputes the estimated amount, it would be in complete defiance of logic and contrary to the very object of the scheme to reject a Declaration on the ground of being ineligible without giving a chance to the declarant to explain as to why its Declaration should be accepted and relief under the scheme be granted. This Court held that when an authority relies upon a document, copy of the same should be made available to the aggrieved party so that the aggrieved party can respond to such document and effectively makes its defence. Nonfurnishing of report dated 20th February, 2020 to the persons was held to be in violation of the principles of natural justice vitiating the impugned decision taken. The principles laid down by this Court in the said judgment of Eminence Container Lines and Anr. (supra) squarely apply to the facts of this case. 53. This Court in case of Sabareesh Pallikere (supra) held that all that would be required for being eligible under the said scheme is a written communication which w....
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.... (supra) has held that for eligibility under the said SVLDRS, the quantification need not be on completion of investigation as claimed by the petitioner therein. This Court in case of Sai Ram Mech & Tech India Private Limited (supra) considered identical facts where the petitioner had made a statement before the Superintendent (Prev.) CGST and Central Excise, Palghar Commissionerate under sections 70 and 174 of the Central Goods and Services Tax Act, 2017 read with section 14 of the Central Excise Act, 1944 and section 83 of the Finance Act, 1994. In that matter, the director of the assessee was put a question by the Superintendent as to what was service tax liability of the petitioner for the period under the provisions and when the petitioner was going to discharge such liability. In response to that question, the director stated that though he did not have exact figure of liabilities at that point of time but he admitted that the net service tax liability for the period under consideration would be Rs. 40 to Rs. 45 lakhs subject to verification of books of account which liability he undertook to pay as per the time line given in his answer. 56. This Court noticed in the said ju....
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....b (supra) has considered the objects and reasons and the purpose of introducing the said Sabka Vikas (Legacy Dispute Resolution Scheme, 2019) framed by the Government of India. The Government took cognizance of the fact that GST had completed two years. An area that concerns was that there were huge pending litigations from pre-GST regime. More than 3.75 lakhs crores were blocked in litigations in service tax and excise. There was need to unload this baggage and allow the business to move on and accordingly proposed a Legacy Dispute Resolution scheme that would allow quick closure of those litigations. The Finance Minister urged that the trade and business to avail this opportunity and be free from Legacy litigations. 60. A perusal of the statement of objects and reasons of the said scheme indicates that the scheme was a one time measure for liquidation of past disputes of Central Excise and service tax as well as ensure the disclosure of unpaid taxes by a person eligible to make a Declaration. It provides that eligible persons shall declare the tax due and pay the same in accordance with the provisions of the scheme. It further provides for certain immunities including penalty, i....