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2020 Supreme(Bom) 1182
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
UJJAL BHUYAN, ABHAY AHUJA, JJ.
M/s. G.R. Palle Electricals – Petitioner
Versus
Union of India and Others – Respondents
Writ Petition (Stamp) No. 3485 of 2020
Decided On : 26-11-2020
Advocate Appeared:
For the Petitioners: Ashok Kotangle, Maithili Iyer Ghosh, Shakuntala Sharma.
For the Respondents: Pradeep S. Jetly, J.B. Mishra.
The main legal point established in the judgment is the importance of quantifying duty liability before the cut-off date and the requirement for the Designated Committee to adhere to the principles of natural justice in considering declarations under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
Headnote:
Sabka Vishwas - Legacy Dispute Resolution - Central Goods and Services Tax Act, 2017 - Section 70, Section 125, Section 126, Section 127 - Summary: The court discussed the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and its relevant sections, focusing on the eligibility criteria for filing a declaration under the scheme. The court emphasized the definition of 'tax dues' and the relief available to declarants under different categories. It highlighted the importance of quantifying the duty involved before the cut-off date of 30.06.2019 and the role of the Designated Committee in verifying and determining the amount payable by the declarant. The court also emphasized the principles of natural justice and the liberal view required for the successful implementation of the scheme.
Fact of the Case:
The petitioner, a government licensed electrical contractor, sought to quash an order rejecting its application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, citing pending investigation for alleged non-payment of service tax dues. The petitioner argued that its declaration was eligible under the scheme, while the respondents contended that the petitioner was ineligible due to pending investigation and non-quantification of duty amount before the cut-off date.
Finding of the Court:
The court found that the petitioner's duty liability had been quantified before the cut-off date, making it eligible to file the declaration under the scheme. It also emphasized the need for the Designated Committee to grant a hearing before rejecting an application, in line with the principles of natural justice.
Issues: The key issues revolved around the eligibility of the petitioner to file a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, considering the pending investigation and quantification of duty amount before the cut-off date.
Ratio Decidendi: The court's decision was based on the interpretation of the scheme's provisions, emphasizing the importance of quantifying duty liability before the cut-off date and the need for the Designated Committee to adhere to the principles of natural justice.
Final Decision: The court set aside the order rejecting the petitioner's application and remanded the matter back to the Designated Committee for reconsideration, emphasizing the need for a speaking order and due opportunity of hearing for the petitioner.
JUDGMENT :
UJJAL BHUYAN, J.
1. Heard Mr. Ashok Kotangle, learned counsel for the petitioner and Mr. Pradeep Jetly, learned senior counsel alongwith Mr. J.B. Mishra, learned counsel for the respondents.
2. By filing this petition under Article 226 of the Constitution of India, petitioner seeks quashing of order dated 22.01.2020 passed by the Designated Committee rejecting its application (declaration) under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and further seeks a direction to the respondents to consider afresh such application (declaration) as per the above scheme.
3. Case of the petitioner is that it is a proprietorship firm and Mr. Govind Ramlu Palle is the sole proprietor. Petitioner is a government licensed electrical contractor and engineer. It provides taxable services while carrying works contract services, supply of manpower services and repairs and maintenance services to Maharashtra State Electricity Distribution Company Limited. Petitioner was holder of service tax registration certificate under the jurisdiction of Navi Mumbai Commissionerate.
4. A summons under section 70 of the Central Goods and Services Tax Act, 2017 (briefly ‘the CGST Act’ hereinafter) was issued to the petitioner from the office of Commissioner of Central Goods and Services Tax (CGST) and Central Excise, Navi Mumbai on 05.01.2018 informing the petitioner that an enquiry against it had been initiated for evasion of government dues (service tax dues) in connection with which the proprietor was summoned for appearance. Pursuant to such summons, proprietor had appeared before the authorities and his statement was recorded on 11.01.2018. Petitioner acknowledged in his statement that outstanding service tax dues for the period from 2015-2016 to June, 2017 was Rs. 60 lakhs (approximately). In this connection, Superintendent (Anti-Evasion, G-V), office of the Commissioner of CGST and Central Excise, Navi Mumbai wrote to the proprietor on 24.01.2018 reminding him that in his statement dated 11.01.2018 he had admitted service tax liability of Rs. 60 lakhs and had promised to discharge Rs. 15 lakhs by 15.01.2018 which had not been discharged.
5. It may be mentioned that the enquiry/investigation against the petitioner for alleged non-payment of service tax dues pertain to the period from April, 2013 to June, 2017. Petitioner had stated that service tax liability was Rs.60 lakhs (approximately) which was outstanding for the period from 2015-2016 to June, 2017. According to the petitioner, the entire amount of service tax dues for the period from April, 2013 to June, 2017 worked out to Rs. 91,29,094.00. It is stated that petitioner had paid the aforesaid amount in entirety but because of delay in payment it had to pay additionally a sum of Rs. 1,46,985.00 as interest on delayed payment.
6. Though the respondents continued to issue summons and letters to the petitioner, formal proceedings like issuance of show-cause notice etc. were not initiated.
7. In the meanwhile, Central Government introduced an amnesty scheme called Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (briefly ‘the scheme’ hereinafter) as part of Finance (No. 2) Act, 2019. Subsequently, Central Board of Indirect Taxes and Customs issued notification on 21.08.2019 appointing 01.09.2019 as the due date for commencement of the scheme; Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 framed by the Central Government were also notified.
8. Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 (briefly “the Rules” hereinafter) has since been amended. As per rule- 3, the declaration made under sub-section (1) of section 125 would be in form SVLDRS-1. Rule-6(3) says that the form issued by the Designated Committee under sub-section (2) of section 127 shall be in form SVLDRS-2 mentioning the estimated amount payable by the declarant alongwith a notice of opportunity for personal hearing. As per sub rule (4), if the declarant waives personal hearing and indicates
