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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Ujjal Bhuyan, Milind N. Jadhav, JJ.
M/s. New India Civil Erectors Private Limited - Petitioner
Versus
Union of India and others – Respondents
Writ Petition (L) NO.989 OF 2020
Decided On : 12-03-2021
Constitution of India, 1950 - Article 226 - Companies Act, 1956 - Finance Act, 1994 - Section 83 - Central Goods and Services Tax Act, 2017 - Section 70 - Central Excise Act, 1944 - Section 14 – Finance Act, 2019 - Section 125(1)(f) – Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 – Declaration was rejected on ground of not eligible - Business of executing civil, mechanical and construction contracts - Category of voluntary disclosure - Seeks quashing of order passed by designated committee i.e., respondent No.4 rejecting declaration of petitioner under Scheme - Further seeks direction to respondent to reconsider declaration of petitioner under said scheme and grant admissible relief(s) to petitioner - Petitioner’s declaration under scheme was rejected on ground that petitioner had filed declaration after initiation of enquiry - Therefore, petitioner was not eligible to file declaration under category of voluntary disclosure in terms of section 125(1)(f) of Finance Act, 2019 - whether that was a summons issued under the Finance Act, 1994 by invoking section 70 of CGST Act -
Finding of the court: It clear that if an enquiry or investigation or audit was initiated on or before 30.06.2019 then such a person would not be eligible to make a declaration under voluntary disclosure category - Logical corollary to this would be that an enquiry or investigation or audit post would not act as a bar to filing of declaration under voluntary disclosure category - Respondent No.4 was not justified in rejecting declaration of petitioner, it would not be necessary for us to examine other points raised by petitioner particularly relating to the nature of the summons issued under section 70 of CGST Act - Absence of such a provision, summons would be construed to be one under CGST Act - If that be so then enquiry to which petitioner was made subject to was under CGST Act and not under Act, 1994 - Therefore, initiation of enquiry against petitioner was not under Act, 1994 dealing with service tax but under CGST Act - On this ground, declaration of petitioner ought not to have been rejected - Set aside and quash order and remand matter back to respondent No.4 for taking a fresh decision on declaration filed by petitioner treating same as a valid declaration under voluntary disclosure category and thereafter grant admissible relief to petitioner.
Result: Writ petition allowed
JUDGMENT :
Ujjal Bhuyan, J.
Heard Mr. Bharat Raichandani, learned counsel for the petitioner and Mr. Pradeep Jetly, learned senior counsel for the respondents.
2. By filing this petition under Article 226 of the Constitution of India, petitioner seeks quashing of order dated 29.01.2020 passed by the designated committee i.e., respondent No.4 rejecting the declaration of the petitioner dated 26.12.2019 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and further seeks a direction to the said respondent to reconsider the declaration of the petitioner under the said scheme and grant the admissible relief(s) to the petitioner.
3. Petitioner is a private limited company incorporated under the Companies Act, 1956 having its registered office at Mittal Tower, Nariman Point, Mumbai. Petitioner is engaged in the business of executing civil, mechanical and construction contracts for its clients. Being a service provider, it was registered as such under the Finance Act, 1994.
4. Petitioner has stated that it did not receive legitimate payments for construction of Bina refinery from Bharat Oman Limited with whom it had entered into a service contract during the period 2008-10. Consequently, petitioner was not able to discharge its service tax liability for the period from 01.04.2015 to 30.06.2017.
5. Summons dated 19.12.2019 was issued to the petitioner by the office of Principal Commissioner of Central GST, Mumbai South Commissionerate. The summons was issued under section 70 of the Central Goods and Services Tax Act, 2017 (briefly ‘the CGST Act’ hereinafter). Petitioner was informed that an enquiry against it was being carried out. Summoning authority had reasons to believe that petitioner was in possession of facts/information/documents/records material to the above enquiry. Therefore, petitioner was asked to comply with the summons and furnish the information and documents as per the schedule to the summons.
6. On 19.12.2019, statements of Shri. Sanjay P. Ahire, Accountant and Shri. Kishan Chand Agarwal, Legal Consultant of the petitioner were recorded before the Superintendent, Anti-Evasion, Group 8 in the office of Mumbai South Commissionerate. In their statements, they admitted that service tax of Rs.94,26,823.00/- for the period from 2015-16 upto 30.06.2017 was payable by the petitioner with interest and penalty.
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. Objective of the scheme was to bring to an end pending litigations pertaining to service tax and central excise which stood subsumed with the goods and services tax (GST), in the process granting considerable relief to the declarants subject to eligibility.
8. Petitioner filed declaration in the prescribed form under the scheme on 26.12.2019. Petitioner declared an amount of Rs.92,13,450.00 as service tax dues for the period from 01.04.2015 to 30.06.2017. The declaration was made under the category of voluntary disclosure.
9. However, vide email dated 29.01.2020, respondent No.4 rejected the declaration of the petitioner on the ground of ineligibility. As per the accompanying remarks, Deputy Commissioner (Anti-Evasion) had informed that enquiry against the petitioner was initiated on 19.12.2019 where after petitioner had filed declaration on 26.12.2019. Since the declaration was made after initiation of enquiry, it was held that petitioner was not eligible to file declaration under the category of voluntary disclosure and accordingly the declaration was rejected in terms of section 125(1)(f) of the Finance (No.2) Act, 2019.
10. After the declaration of the petitioner was rejected, petitioner received several letters from respondent No.3 seeking to re-open the enquiry against the petitioner leading to issuance of summons dated 07.02.2020 under section 70 of the CGST Act.
11. Though petitioner represented before respondent No.4 on 06.03.2020 a
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