TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1210
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....cause notice bearing No.01/2020 dated 06.02.2020 issued by A2. 3. The basis of the challenge was that the show cause notice would no longer survive, as the Designated Committee had issued a Discharge Certificate in Form SVLDRS - 4 on 23.07.2020 under the Scheme. The Writ Petition had come to be allowed on 13.12.2024 on the ground that the declaration filed by the respondent had been acknowledged, Form SVLDRS - 3 was issued on 28.02.2020, Form SVLDRS-4 issued on 23.07.2020 and hence hearing notice dated 07.02.2022 in reference to show cause notice dated 06.02.2020 could not have been issued, unsettling the case settled under the provisions of the Scheme. As against that order, the Designated Committee and the Central Excise Commissioner are in appeal. 4. Mr.AR.L.Sundaresan, learned Additional Solicitor General assisted by Mr.RajnishPathiyil, learned Senior Panel Counsel and Ms.Lydia Steffi, learned Junior Panel Counsel for the appellants advance the following submissions. 5. There are several illegalities in the Declaration made by the respondent. Firstly, the application purports to have been filed by 'Sundaram Satish Kumar, whereas the registered dealer is called 'Heaven Engine....
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....ence the Department is within its rights to proceed with show cause notice dated 06.02.2020. He would conclude by saying that no prejudice would be caused to the respondent as the show cause notice would be adjudicated in accordance with law. 12. Per contra, Mr.Mudimannan, learned counsel for the respondent points out that, the requirement under Section 129(2)(c) of the Scheme is that the Discharge Certificate be revoked within one year. Such revocation has not transpired till date. Hence, the conclusion of the Writ Court is correct. 13. He would also point out that there is no suppression as the respondent has, in second reply dated 14.08.2020 to the impugned show cause notice, made a disclosure that a Declaration had been made under the Scheme, seeking time to file a reply. Even at that stage, it had been open to the Department to have taken action under Section 129(2)(c), despite which, they did nothing. Hence, the respondent cannot be penalised for the inaction and carelessness on the part of the Department. 14. Mr.Mudimannan draws attention to the Circulars issued on the heels of the SVLDRS Scheme, pointing to the Frequently Asked Questions in relation to SVLDRS Scheme as w....
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....ld not have transpired. They say that the choice of the incorrect category by the Respondent was deliberate so as to thwart the proper processes and attain the acceptance of his application. 22. We have carefully considered the rival contentions in this regard. The selection of category as 'voluntary disclosure' is, undoubtedly, incorrect. The factum of investigation in 2014 and 2019 is admitted, as statements have also been recorded from the respondent in the course thereof. Hence it stands to reason that the respondent ought to have selected the category 'Investigation, Enquiry or Audit' and the selection by him of another category which is incorrect amounts to a material falsehood, to the knowledge of the Respondent. 23. The Circulars relied upon by the Respondent are extracted below, and do indicate some discussion in regard to this aspect. Circular No. 1073/06/2019.GX F. No. 267/78/2019/CX-8-Pt.III Government of India Ministry of Finance Department of Revenue Central Board of Indirect Taxes and Customs Dated, the 29th October, 2019 To The Principal Chief Commissioners/ Chief Commissioners (All) The Principal Directors General/ Directors General (All) Subject:....
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.... clarified in the context of the various provisions of the Finance (No.2) Act, 2019 and Rules made thereunder, as follows: (i) Only the persons who are eligible in terms of Section 125 can file a declaration under the Scheme. The eligibility conditions are captured in Form SVLDRS-1 (Sr. No. 8). The system automatically disallows persons who are not eligible from filing a declaration. However, there is a possibility that such ineligible persons may still make a declaration by selecting an incorrect response. For instance, under Sr. No. 8.1, the person making a declaration has to indicate whether he/she has been convicted for an offence for the matter for which the declaration is being made. If, the answer is 'Yes', then the person is ineligible and is not allowed to proceed further by the system. However, such person is able to file a declaration if he/she incorrectly indicates 'No' as the answer even though he/she has been convicted. Such declarations are void and do not merit consideration under the Scheme. Such persons may be informed of their ineligibility through a letter. ..... (vi) Section 125(1)(f) bars a person from making voluntary disclosure after be....
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....ent and the final hearing has taken place on or before the 30th day of June, 2019; (d) who have been issued a show cause notice under indirect tax enactment for an erroneous refund or refund; (e) who have been subjected to an enquiry or investigation or audit and the amount of duty involved in the said enquiry or investigation or audit has not been quantified on or before the 30th day of June, 2019; (f) a person making a voluntary disclosure,- (i) after being subjected to any enquiry or investigation or audit; or (ii) having filed a return under the indirect tax enactment, wherein he has indicated an amount of duty as payable, but has not paid it; (g) who have filed an application in the Settlement Commission for settlement of a case; (h) persons seeking to make declarations with respect to excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944. (2) A declaration under sub-section (1)shall be made in such electronic form as may be prescribed. (emphasis ours) 28. Hence, the bars, both under Section 125(1)(e) and (f) stand attracted in this matter, as the investigation, enquiry, audit of the matter was on-going and no demand has been quanti....
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....plication. 35. Interestingly, both the addressee and the addressor in that letter are one and the same, meaning essentially that the same person who was holding two charges, has written to herself from her capacity as Assistant Commissioner (ECM) to herself in the capacity as Assistant Commissioner (TRC Section). 36. The third reply to show cause notice is dated 27.08.2021, wherein the Respondent seeks withdrawal of the show cause notice on the ground that the notice had been issued subsequent to the filing of application under SVLDRS as detailed in his reply. The Department replied on 07.02.2022 stating that the show cause notice cannot be withdrawn, on the reasoning that they have verified the records and found that the SVLDRS Declaration had been filed by the respondent when he was under investigation. They also point out that the impugned show cause notice dated 06.02.2020 had been issued prior to the payment by the respondent in the month of June, 2020. 37. A personal hearing notice dated 08.03.2022 was thereafter issued calling upon the respondent to appear on 05.04.2022 for adjudication of the show cause notice in response to which the respondent sought some time, using t....
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....on as though the Declaration had never been made with all statutory consequences to follow. 40. The application filed on 15.01.2020 certainly contains a false declaration of a material particular, as the very category under which it has been submitted is wrong. Hence we are of the considered view that the presumption for obliteration of the Declaration stands triggered as per Section 129(2)(c) of the Scheme with all consequences. These aspects ought to have been taken note of by the Writ Court as they have been set out in detail in additional affidavit dated 04.11.2022. 41. The obliteration of the Declaration would be complete and comprehensive in respect of all the processes that have transpired post submission of the application, including the issuance of Form 3, the receipt of the amount and issuance of Discharge Certificate on 23.07.2020. Moreover, Section 130(1) (b) of the Scheme states that any amount paid under this Scheme shall not be refundable under any circumstances. Hence, with the obliteration of the application and all further events upto and including the discharge certificate dated 23.07.2020, the respondent would also forfeit the payment made under the SVLDRS Sch....
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.... accepted, as they say. 'As per S.125(1)(f)(ii), where return has been filed and an amount of duty indicated as payable has not been paid, then the ARN become ineligible under SVLDRS. However, in this case no duty has been declared in the return filed. - DGGI, CZU, Audit and ECM have stated that no enquiry or audit initiated against the applicant. - Form 1 may be accepted and Form 3 may be issued.' 48. Subsequent file notings dated 16.07.2020 as well as the positive action taken by the Department by issuing Form 3 on 28.02.2020, receiving the declared amount on 29.06.2020 and issuing discharge certificate in Form 4 on 23.07.2020 establishes without doubt that they had no idea that there was a defect/lacuna in the application. There is also no reference therein to Section 129(2)(c) of the Scheme. Clearly, they had no inkling of matters at that time. The relevant notings have been furnished and are extracted below:- 49. In fact, if they did have knowledge of the fact that the application was compromised, and still went ahead to issue Form 3 and discharge certificate, in Form 4, the matter assumes another ominous dimension altogether. In such circumstances, their submissions would b....
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.... 040 C.No.IV/06/23/2014-SIR Gr XI Date: 27.08.2020 To, The Assistant Commissioner of GST & C Ex (TRC Section) Chennai Outer Commissionerate Madam, Sub: SVLDRS application of Shri Sundaram Satish Kumar (ARN No.LD1501200009288) - Reg. ----- Please refer SVLDRS application filed by Shri Sundaram Satish Kumar (STC BULPS3625PSD001) having ARN No.LD1501200009288. 2. In this regard, it is noticed that SVLDRS-4 has been issued to the taxpayer (Shri Sundaram Satish Kumar - STC BULPS3625PSD001) for an amount of Rs. 64,32,402/- for the period April'2014 to June'2017. However, an investigation was under process against the said taxpayer in Enforcement and Compliance Management Section, Chennai Outer Commissionerate and subsequently SCN No.01/2020 dated 06.02.2020 was issued to the taxpayer involving an amount of Rs. 9,07,53,180/- along with penalty and interest for the period October '2012 to June '2017. 3. Further, it appears that the taxpayer deliberately filed the SVLDRS application under "Voluntary Disclosure" despite being aware of the fact that the case is under "Investigation". Hence, it appears....
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....2023/794 dated 15.01.2024 to the Principal Chief Commissioner of GST and Central Excise wherein, at Para 4(ii) it is stated that "regarding the role of Ms.Supriya Chandran, the then Assistant Commissioner, it was observed that she was in-charge of both investigation and SVLDRS processing in the material time; that however, there was a lapse on her part in as much as furnishing "NIL" report denoting that there was no investigation against the declarant; that it appeared that the officer did not notice the name of the unit viz. M/s.Heaven Engineering while putting up the file to the designated Committee. It is further stated, in the letter that though it is a fact that SVLDRS-1 declaration has a mention of M/s.HeavenEngineering in the addressed block, it was taken to be a lapse by over sight and not a deliberate act, as it may not practically be possible for an officer at the rank of the Assistant Commissioner to compare each and every detail of the application vis-à-vis reports received; and thus while there appeared to be a negligence on the part of the Officer, but the same cannot be attributed to a deliberate mis-conduct and thus an Administrative Warning to the Officer fo....