AI Drafter 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2025 (5) TMI 939
X X X X Extracts X X X X
X X X X Extracts X X X X
....as challenged the rejection of the declarations made by the petitioner dated 14.11.2019 and 15.01.2020 in Form SVLDRS-1 filed by the petitioner under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (for short 'the SVLDRS'). 5. The brief facts of the case are as under : 5.1. The petitioner is engaged in the business of manufacture of various varieties of Yarns like POY and FDY and also other textile products. The petitioner was duly registered under the provisions of the Central Excise Act, 1944. As the petitioner was manufacturing the textile goods, the provisions of Textiles Committee Act, 1963 (for short 'the Act, 1963') were made applicable to the petitioner by the Textile Committee, Mumbai constituted under Section 3 of the said Act. 5.2. According to the petitioner, the provisions of the said Act and the Rules were not applicable to the manufacturing and business activities involving textile goods of the petitioner but the question whether the petitioner was obliged to comply with the provisions of the Act, 1963 and the Rules framed thereunder or not was subject matter of challenge before the Textiles Committee Appellate Tribunal formed under the said Act and t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Act, 2019 with an objective to settle the old cases under the various Indirect Tax Enactments which were discontinued and subsumed under the provisions of the GST Act. 5.10. The petitioner therefore availed the benefit of the SVLDRS by filing Form SVLDRS-1 and Declaration made thereunder dated 14.11.2019 as the Appeal filed by the petitioner before the Appellate Tribunal under the Act, 1963 was pending on 30th June, 2019 and the amount of demand of Rs. 34,63,188/- was "tax dues" as per the SVLDRS. 5.11. The petitioner thereafter was served upon the letter from the Office of the respondent No. 2 issued on 09.12.2019 providing the date of hearing on 11.12.2019 calling upon the petitioner to show-cause as to why the application dated 14.11.2019, which appears to be liable for rejection, should not be rejected as the case of the petitioner was about recovery of Cess and being dealt by the Textiles Committee Cess Appellate Tribunal at Mumbai and therefore, the Designated Committee has no authority to grant relief in the case. 5.12. The petitioner thereafter filed a reply dated 26th December, 2019 contending that the Act, 1963 was one of the Enactments to which the SVLDRS was a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ellate Tribunal or the Commissioner ( Appeals); (n) "indirect tax enactment" means the enactments specified in section 121. Section 122. This Scheme shall be applicable to the following enactments, namely:- (a) the Central Excise Act, 1944 or the Central Excise Tariff Act, 1985 or Chapter V of the Finance Act, 1994 and the rules made thereunder; (b) the following Acts, namely:- (i) the Agricultural Produce Cess Act,1940; (ii) the Coffee Act, 1942; (iii) the Mica Mines Labour Welfare Fund Act, 1946; (iv) the Rubber Act, 1947; (v) the Salt Cess Act, 1953; (vi) the Medicinal and Toilet Preparations (Excise Duties) Act, 1955; (vii) the Additional Duties of Excise (Goods of Special Importance) Act, 1957; (viii) the Mineral Products (Additional Duties of Excise and Customs) Act, 1958; (ix) the Sugar (Special Excise Duty) Act, 1959; (x) the Textiles Committee Act, 1963; (xi) the Produce Cess Act, 1966; (xii) the Limestone and Dolomite Mines Labour Welfare Fund Act, 1972; (xiii) the Coal Mines (Conservation and Development) Act, 1974; ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... or one or more appeals arising out of such notice which is pending as on the 30th day of June, 2019, and if the amount of duty is,- (i) rupees fifty lakhs or less, then, seventy per cent. of the tax dues; (ii) more than rupees fifty lakhs, then, fifty per cent. of the tax dues; (b) where the tax dues are relatable to a show cause notice for late fee or penalty only, and the amount of duty in the said notice has been paid or is nil, then, the entire amount of late fee or penalty; (c) where the tax dues are relatable to an amount in arrears and,- (i) the amount of duty is, rupees fifty lakhs or less, then, sixty per cent. of the tax dues; (ii) the amount of duty is more than rupees fifty lakhs, then, forty per cent. of the tax dues; (iii) in a return under the indirect tax enactment, wherein the declarant has indicated an amount of duty as payable but not paid it and the duty amount indicated is,- (A) rupees fifty lakhs or less, then, sixty per cent. of the tax dues; (B) amount indicated is more than rupees fifty lakhs, then, forty per cent of the tax dues. Section 125. (1) All persons shall be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1 of the SVLDRS which means the enactments specified in Section 122 of the SVLDRS. It appears that Sub-clause (x) of Clause (b) of Section 122 of the SVLDRS is a part of the enactments and therefore, the Act, 1963 is an Indirect Tax Enactment and the Scheme is applicable to the said Act. Section 123 of the SVLDRS provides for 'tax dues' and clause (a) of Section 123 of the SVLDRS refers to the pending Appeal before the Appellate Forum and the Appellate Forum as per clause (f) of Section 121 of the SVLDRS means Supreme Court or High Court or CESTAT or the Commissioner (Appeals). Therefore, admittedly, clause (a) of Section 123 of the SVLDRS could not be applicable in the facts of the case of the petitioner to determine the tax dues. However, Sub-clause (b) of Section 123 of the SVLDRS refers to the show-cause notice under any of the Indirect Tax Enactment received by the declarant on or before 30th day of June, 2019. 11. In the facts of the case, the petitioner has received the show-cause notice in the year 2011 i.e. much prior to the 30th June, 2019 and it is not dispute that the Act, 1963 is an Indirect Tax Enactment as per the provisions of Section 122(b) of the SVLDRS to whic....
X X X X Extracts X X X X
X X X X Extracts X X X X
....une, 2019. 14.2 It was therefore submitted that merely because the petitioner has filed the SVLDRS Form in the Category of 'litigation' and Sub-category of 'Appeal Pending', the same could not have been rejected by the Designated Committee but as per the benevolent scheme, the benefit ought to have been granted on the basis of the tax dues relatable to the show-cause notice which was issued prior to 30th June, 2019 which may be subject matter of Appeal which cannot be considered as pending before the Appellate Forum as per the provisions of Section 121 (f) of SVLDRS so as to consider the tax dues as per Section 123 (a) (i) of SVLDRS. 14.3. In support of his submissions, reliance was placed on the decision of this Court in case of Sunflowers Developers Versus State of Gujarat rendered on 04.12.2019 in Special Civil Application No.19147 of 2019 with Special Civil Application No. 19152 of 2019 which was followed in the decision in case of Sky Industries Limited Versus State of Gujarat rendered on 07.06.2023 in Special Civil Application No. 246 of 2023. It was submitted that this Court while analysing the benevolent Amnesty Scheme under the VAT Act has considered the object of su....
X X X X Extracts X X X X
X X X X Extracts X X X X
....'Pending Appeal' but as the Appeal filed by the petitioner is not before the Appellate Forum defined under Section 121 (f) of the SVLDRS, the tax dues as per Section 123 (a) (i) of the SVLDRS cannot be computed and the petitioner was therefore, rightly not eligible for relief available under the SVLDRS as per the provisions of Section 124 (1) (a) of the SVLDRS as there is no tax dues with regard to the Appeal Pending before the Appellate Forum in the case of the petitioner so that the petitioner becomes eligible for the relief under the Scheme. 16. Considering the submissions made by the learned advocates for the parties, it appears that the respondent-Designated Committee is formed under the Rule-5 of the Sabka Vishwas Legacy Dispute Resolution Scheme (SVLDRS) Rules, 2019 for short (for short 'the Rules') under consist of Principal Commissioner or Commissioner of Central Excise and Service Tax as the case may be and the Additional Commissioner or the joint Commissioner of the Central Excise and Service Tax as the case may be and as per the proviso, there shall be only one such Designated Committee in Commissioner of Central Excise and Service Tax. Therefore, the application fil....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ity and taxation are often strangers, attempts should be made that these do not remain always so and if a construction results in equity rather than in in-justice, then such construction should be preferred to the literal construction. Furthermore, in the instant case we are dealing with an artificial liability created for counteracting the effect only of attempts by the assessee to reduce tax liability by transfer. It has also been noted how for various purposes the business from which profit is included or loss is set off is treated in various situations as assessee's income. The scheme of the Act as worked out has been noted before." 19. The Hon'ble Supreme Court in case of K.P. Varghese versus Income Tax Officer, Ernakulam and Another reported in 131 ITR 597 while considering the interpretation of statutory provisions has held as under : "The primary objection against the literal construction of s.52, sub-s. (2), is that it leads to manifestly unreasonable and absurd consequences. It is true that the consequences of a suggested construction cannot alter the meaning of a statutory provision but it can certainly help to fix its meaning. It is a well-recognised rul....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e second respondent to keep the assessment proceedings in abeyance as they wanted to avail the benefit of the amnesty scheme, the respondent ought to have respected such request and afforded the petitioners sufficient time to avail the benefit of the amnesty scheme, however, on the contrary, the second respondent, in undue haste, has proceeded to pass an ex-parte high pitched best judgment assessment order under section 34 (8) of the GVAT Act." 21. The decision of the Hon'ble Bombay High Court in case of Star Television News Limited (Supra) has been upheld by the Hon'ble Apex Court reported in (2015) 12 SCC 665 wherein, it is held that provisions of Section 245-HA (1) (iv) of the Income Tax, 1961 was rightly held to be violative of Article 14 by the High Court but it did not invalidate the said provisions as it was possible to read down the provisions to avoid holding the provisions as unconstitutional. 22. Applying the conspectus of law, we are of the opinion that the SVLDRS being a Scheme framed by the Central Government in the Finance Act, the object of the Scheme is to reduce the litigation in view of the coming into force of the GST Act with effect from 01.07.2017 as suc....