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2020 Supreme(Bom) 1207
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
UJJAL BHUYAN, ABHAY AHUJA, JJ.
Elaf Tours and Travels and Others – Petitioners
Versus
Union of India and Another – Respondents
Writ Petition (ST.) No. 92283 of 2020
Decided On : 26-11-2020
Advocate Appeared:
For the Petitioners: Sulaiman Mohd. Khan, Manorama Mohanty, Kalpesh Nansi.
For the Respondents: Jitendra B. Mishra, Sham Walve.
The main legal point established in the judgment is that the rejection of a declaration under the Sabka Vishwas Scheme without affording an opportunity of hearing to the declarant is in violation of the principles of natural justice.
Headnote:
Sabka Vishwas - Legacy Dispute Resolution - Chapter-V of the Finance Act, 1994 - Sections 121(c), 123(e), 124(1)(c), 125 - Summary of the acts and sections referenced and discussed by the court.
Fact of the Case:
Petitioner seeks quashing of order rejecting application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. Petitioner is an unregistered partnership firm alleged to have failed to pay service tax. The scheme was introduced to end pending litigations under the earlier indirect tax regime.
Finding of the Court:
The court found that the rejection of the petitioner's declaration was not justified and held the petitioner eligible to file a declaration under the arrears category. The matter was remanded back to the Designated Committee for further consideration.
Issues: The main issue was the eligibility of the petitioner to file a declaration under the Sabka Vishwas Scheme, specifically under the arrears category.
Ratio Decidendi: The court interpreted the relevant sections of the Finance Act, 1994 and the Sabka Vishwas Scheme, emphasizing that the rejection of the declaration without affording an opportunity of hearing to the declarant was in violation of the principles of natural justice.
Final Decision: The writ petition was allowed, the rejection of the declaration was set aside and quashed, and the matter was remanded back to the Designated Committee for further consideration.
JUDGMENT :
UJJAL BHUYAN, J.
1. Heard Mr. S.M. Khan, learned counsel for the petitioners and Mr. J.B. Mishra, learned counsel alongwith Mr. Sham Walve, learned counsel for the respondents.
2. By filing this petition under Article 226 of the Constitution of India petitioners seek quashing of order dated 14th February, 2020 passed by the respondents rejecting the application (declaration) filed by petitioner No. 1 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and further seeks a direction to the respondents to consider the said application (declaration) as a valid declaration and grant the reliefs to petitioner No. 1 in terms of the aforesaid scheme.
3. Petitioner No. 1 is stated to be an unregistered partnership firm comprising of petitioner Nos.2 to 4 as the partners. Petitioner No. 1 carries on the business of Haj and Umrah tours/journeys to Saudi Arabia and has been facilitating Haj pilgrimage to Saudi Arabia since many years.
4. Show cause cum demand notice dated 5th April, 2019 was issued to petitioner No. 1 by the Deputy Commissioner of Central Goods and Service Tax (CGST) and Central Excise, Palghar alleging amongst others that petitioner No. 1 had failed to pay service tax amount of Rs. 19,21,465.00 for the period from 2013-14 to 2017-18 (upto June, 2017).
5. The above show cause cum demand notice culminated in an order in original dated 9th August, 2019 passed by the Assistant Commissioner of CGST and Central Excise, Division-1, Palghar. It may be mentioned that personal hearing was granted to the petitioner on 9th May, 2019. After the personal hearing petitioner filed written submission on 16th May, 2019. By the order in original, the adjudicating authority confirmed the demand of service tax amounting to Rs. 19,21,465.00 besides ordering payment of interest and imposition of penalty.
6. In the meanwhile, Central Government introduced the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (briefly “the scheme” hereinafter) as part of the Finance (No. 2) Act, 2019 to bring an end to pending litigations under the earlier indirect tax regime which now stood subsumed under the Goods and Services Tax (GST). The scheme was made effective from 1st September, 2019.
7. To avail the benefits under the scheme petitioner filed application (declaration) under section 125 in form SVLDRS-1 on 8th January, 2020 under the arrears category with further sub-category of appeal not filed or appeal having attained finality. However, petitioner received an e-mail dated 14th February, 2020 from respondent No. 2 rejecting the declaration filed by the petitioner.
8. Aggrieved, present writ petition has been filed seeking the reliefs as indicated above.
9. Respondents have filed affidavit. Stand taken in the affidavit is that petitioner’s application (declaration) was rightly rejected by the Designated Committee after following the due procedure of law. Petitioner was not eligible to avail the benefits under the scheme and therefore its declaration in form SVLDRS-1 could not have been accepted under section 125(1)(c) of Chapter-V of the Finance (No. 2) Act, 2019 (briefly “the Act” hereinafter). Referring to the said provision it is stated that any person who has been issued a show cause notice under the indirect tax enactment and the final hearing had taken place on or before 30th June, 2019 would not be eligible to make a declaration under the scheme. In the case of petitioner No. 1 final hearing pursuant to the show-cause notice was held on 9th May, 2019. Thus, petitioner No. 1 stood ineligible to file declaration under the arrears category. Therefore, rejection of the declaration of petitioner No. 1 has been justified.
10. Mr. Khan, learned counsel for the petitioners has referred to section 121(c), section 123(e), section 124(1)(c) and section 125 of the Act and contends that declaration of petitioner No. 1 under the arrears category with sub-categorization of appeal not filed or appeal having attained finality was fully maintain
