The admission and quantification of tax liability by the declarant before the cut-off date of 30.06.2019 makes them eligible to file a declaration under the Sabka Vishwas Scheme, 2019.

JUDGMENT :

Ujjal Bhuyan, J.

1. Heard Mr. Devendra Jain, learned counsel for the petitioner and Mr. Pradeep S. 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 31.01.2020 passed by the designated committee i.e. respondent No.1 rejecting the declaration of the petitioner dated 24.12.2019 filed under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (briefly “the scheme” hereinafter) and further seeks a direction to the said respondent to reconsider the declaration of the petitioner dated 24.12.2019 in terms of the scheme and grant the reliefs to the petitioner.

3. According to the petitioner, he is the sole proprietor of the proprietorship firm M/s. Finbros Marketing having its office at Thane (West). Petitioner is engaged in the business of facilitating distribution of personal loan in Mumbai and is associated with various banks and financial institutions. Being a service provider, it was registered as such under Chapter V of the Finance Act, 1994.

4. It is stated that an inquiry was initiated by the Senior Intelligence Officer of Directorate General of GST Intelligence (DGGI), Pune Zonal Unit against the petitioner for alleged non-payment of service tax dues during the period from 2013-14 to 2017-18 (upto June, 2017).

5. In this connection, summons dated 28.05.2018 under section 14 of the Central Excise Act, 1944 was issued to the petitioner. Responding to the summons, petitioner appeared before the Senior Intelligence Officer and his statement was recorded on oath by the said officer on 06.07.2018. In his statement, petitioner admitted that the total service tax liability for the period under consideration was around Rs.1.93 crores, further stating that after initiation of inquiry, petitioner had paid service tax of Rs.18 lakhs besides undertaking to discharge Rs.50 lakhs by 02.09.2018 and a further amount of Rs.32 lakhs by December 2018. It was also stated that the remaining amount of service tax liability would be paid by March 2019 along with interest due.

6. Similar statement of the petitioner was recorded on 06.06.2019 under section 14 of the Central Excise Act, 1944 read with section 83 of the Finance Act, 1994 and section 174 of the Central Goods and Services Tax Act, 2017. In question No.1 of the statement itself, petitioner was asked as to whether he had paid the entire service tax liability of Rs.1.75 crores. In his reply, petitioner stated that he had paid Rs.3.30 lakhs in the months of September 2018 and October 2018; and made further payment of Rs.10.10 lakhs on 03.06.2019. Balance amount could not be paid because of crisis faced by non-banking financial companies which had affected his business.

7. A further statement of the petitioner on similar lines was recorded by the Senior Intelligence Officer on 25.09.2019. In this statement, he admitted service tax liability of Rs.2,08,29,640.00 for the period 2014-15 to 2017-18 (upto June, 2017).

8. Additional Director General, DGGI, Pune Zonal Unit issued show-cause notice dated 11.11.2019 to the petitioner wherein reference was made to the statements of the petitioner as alluded to herein-above whereafter it was alleged that service tax liability of the petitioner for the aforesaid period amounted to Rs.2,17,97,355.00 which the petitioner had failed to pay.

9. In the meanwhile, Central Government introduced the scheme through the Finance (No.2) Act, 2019 for resolution of disputes relating to central excise and service tax which have since been subsumed in goods and services tax (GST).

10. Availing the opportunity for settlement under the scheme, petitioner made a declaration in terms thereof on 24.12.2019 under the category of inquiry, investigation or audit.

11. On 31.01.2020, respondent No.1 rejected the said declaration of the petitioner on the ground of ineligibility with the remark that the amount of tax dues was not quantified on or before 30.06.20