The main legal point established in the judgment is the mandatory nature of granting an opportunity of hearing and the discretionary power to grant adjournment, emphasizing the principles of natural justice and fair play in action.

JUDGMENT :

UJJAL BHUYAN, J.

1. Heard Mr. Raichandani, learned counsel for the petitioner and Mr. 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 05.05.2020 and further seeks a direction to the respondents to afford an opportunity of hearing to the petitioner and thereafter pass appropriate order in terms of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.

3. It may be mentioned that by the impugned order dated 05.05.2020 issued by respondent No.4 i.e., the designated committee, while granting tax relief of Rs.4,00,39,033.00 and further directing payment of Rs.2,89,14,033.00, CENVAT credit of Rs.3,28,49,069.00 was not accepted by respondent No.4 as pre-deposit made by the petitioner thereby depriving the petitioner the benefit of the said amount while determining the quantum of tax relief and consequential amount payable which would have been nil if the said amount of CENVAT credit was treated as a pre-deposit.

4. Case of the petitioner is that it is a private limited company incorporated under the Companies Act, 1956. It is engaged in the business of providing digital advertising solution services. Being a service provider, it was registered as such under the Finance Act, 1994. It is stated that petitioner was filing service tax returns in terms of the Finance Act, 1994 read with the Service Tax Rules, 1994 and making payment of service tax wherever applicable.

5. It appears that an enquiry was initiated against the petitioner by the service tax department for alleged non-payment of service tax for the period from April, 2016 to June, 2017. By letter dated 01.02.2019, petitioner had informed the Senior Intelligence Officer, Directorate General of Goods and Services Tax Intelligence (DGGI), Zonal Unit, Mumbai that out of the total service tax liability of Rs.8,00,78,066.00, it had paid Rs.4,39,74,069.00 by using input credit of Rs.3,27,81,954.00 and by cash payment of Rs.1,11,92,105.00. The officer was informed that petitioner was in the process of arranging funds for discharging the complete liability of service tax.

6. It is stated that there is no dispute as to the quantum of outstanding service tax liability of the petitioner at Rs.8,00,78,066.00 which was quantified prior to 30.06.2019.

7. In the meanwhile, central government introduced the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (for short ‘Scheme’ hereinafter) vide the Finance (No.2) Act, 2019 (briefly ‘the Act’ hereinafter) for bringing to an end pending litigations pertaining to central excise and service tax under the erstwhile indirect tax regime which have been subsumed under the goods and services tax (GST) by conferring substantial benefits on the declarants subject to eligibility.

8. In terms of the aforesaid scheme, petitioner filed its declaration on 30.12.2019 under the category of ‘investigation, enquiry or audit’ and within the sub-category of ‘investigation by DGGI’. In the said declaration, petitioner declared an amount of Rs.8,00,78,066.00 as the outstanding service tax liability for the period under consideration and also indicated pre-deposit of Rs.4,39,74,069.00.

9. Under section 124(1)(d) of the Act, the amount payable under the scheme is 50% of the tax dues if the tax dues are linked to an enquiry, investigation or audit which amount was quantified on or before 30.06.2019. Section 124(2) of the Act allows for deduction of any predeposit / deposit made by a declarant.

10. In the instant case, tax dues of the petitioner were quantified on or before 30.06.2019 at Rs.8,00,78,066.00. So the amount payable works out to Rs.4,00,39,033.00 being 50% of the tax dues. As per the petitioner’s declaration, it had already paid Rs.4,39,74,069.00 (cash payment of Rs.1,11,25,000.00 and CENVAT credit of Rs.3,28,49,069.00) as pre-deposit / deposit. The same being more than the amount payable i.e., Rs.4,00,39,033.00, there would be no req