The admission of duty liability before the cut-off date constituted quantification under the Sabka Vishwas Scheme, making the declaration valid.

JUDGMENT :

UJJAL BHUYAN, J.

1. Heard Mr. Avinash Poddar, learned counsel for the petitioner and Mr. Sham Walve, learned counsel for the respondents.

2. By filing this petition under Article 226 of the Constitution of India, petitioner seeks quashing of order dated 12.02.2020 issued by respondent No.2 rejecting the declaration of the petitioner under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and further seeks a direction to the respondents to reconsider its declaration after granting due opportunity of hearing.

3. Case of the petitioner is that it is a proprietorship firm which is engaged in providing construction services to various government, local authorities etc. under the category of “works contract services”. Petitioner was registered as a service provider under the Finance Act, 1994.

4. Petitioner has stated that its services were exempted from service tax in view of Exemption Notification dated 20.06.2012, as amended from time to time.

5. An enquiry was initiated by the Service Tax Department against the petitioner for the period from 2014-15 to June, 2017 on the ground that services provided by the petitioner were taxable and not exempted in terms of the aforesaid notification. It is submitted that pursuant to subsequent amendments carried out in the said notification certain services which were earlier exempt became taxable with effect from 01.04.2015. According to the petitioner it did not pay taxes for the services provided which became taxable later on after withdrawal of exemption.

6. During the enquiry petitioner submitted all the record as sought for by the authority. Statement of the proprietor Shri. Kirit Kedarnath Rai was recorded on 28.06.2019. In his statement the proprietor admitted service tax liability of Rs.1,26,54,725.00. However, because of financial crisis it could not deposit the said amount.

7. In the meanwhile, Central Government introduced the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (briefly “the Scheme” hereinafter) vide the Finance (No.2) Act, 2019 to bring to an end pending litigations of central excise and service tax under the erstwhile indirect tax regime by providing benefits to the declarants subject to eligibility.

8. Petitioner vide letter dated 06.09.2019 informed respondent No.4 about its willingness to apply under the scheme further stating that it had admitted tax liability of Rs.1,26,54,725.00 for the period from 2014-15 to 2017-18 (upto June, 2017) as quantified in the statement of the proprietor dated 28.06.2019.

9. On 21.11.2019 petitioner submitted declaration in terms of the said scheme under the category of investigation, enquiry or audit and within the sub-category of investigation by DGGI. In the said declaration petitioner mentioned the duty payable at Rs.1,25,54,725.00. Petitioner was called for personal hearing on 17.12.2019. Though petitioner sought for another date, it was not granted. Thereafter petitioner requested the authority to accept his declaration. On 12.02.2020 petitioner received a letter from respondent No.2 intimating that its declaration was rejected on the ground that quantification of the tax dues was not made final by 30.06.2019 which was the cut off date.

10. Aggrieved, present Writ Petition has been filed.

11. Respondents have filed a common affidavit. Stand taken in the affidavit is that under section 124(1)(d) of the Finance (No.2) Act, 2019 the quantum of tax due had to be quantified on or before 30.06.2019 to be eligible under the scheme where the tax dues are linked to enquiry, investigation or audit. Otherwise under section 125(1)(e) such a person would not be entitled to submit declaration and avail the benefit of the scheme. In so far the petitioner is concerned, it is submitted that petitioner’s claim for acceptance of its declaration is solely based on the statement of the proprietor recorded under section 14 of the Finance Act, 1994 before the investigating agency DGGI, Mumbai on 28.06.2019 i.e. just two days prior to