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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
R.D. DHANUKA, S.M. MODAK, JJ.
Nabeel Construction Pvt. Ltd. – Petitioner
Versus
Union of India, through its Secretary, Department of Revenue, New Delhi – Respondent
Writ Petition No. 96 of 2022
Decided On : 21-01-2022
Constitution of India, 1950 - Article 226 - Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 - Rule 6(2) read with Rule 6(3) - Indian Penal Code, 1860 - Section 193 and 228 - Finance Act - Section 83 and 123(c) - Central Excise Act - Section 14 - Writ of certiorari - Scope of ‘tax dues’ - Service Tax - Liability of - Whether tax liability of petitioner, was already quantified prior to cut off date or not in statement of director of petitioner recorded by investigating officer during course of enquiry or whether quantify of tax dues determined by respondents in show cause notice or not itself was an issue which required personal hearing - whether impugned orders passed by respondents are in violation of principles of natural justice or not - Petitioner is engaged in providing construction services of commercial or industrial buildings and civil structures, other than residential complexes - Seeking quash and set aside order of Designated Committee-I (comprised of respondent nos. 2 and 3) communicated through email whereby rejecting SVLDRS-1 Declaration filed by petitioner.
Finding of the Court:
It clear that said director of petitioner was specifically asked about the service tax liability of the petitioner upto 30th June, 2017 and in reply to said specific question, he admitted the tax liability in the sum of Rs. 1,28,88,541/- The said Senior Intelligence Officer asked further question as to when petitioner would pay the short paid service tax liability in continuity to reply to question no. 9. The said director informed that petitioner had already made payment of Rs. 30 lakhs and was submitting GAR-7 challan for the same and would pay the balance service tax amount on or before 31st March, 2019. It is not in dispute that petitioner thereafter paid further sum of Rs. 60 lakhs after recording the said statement on 28th February, 2019 vide challan, totalling to Rs. 90 lakhs. The said statement made by the director of the petitioner on behalf of the petitioner was issued in terms of section 14 of the Central Excise Act read with section 83 of the Finance Act. It is axiomatic that when a person is visited by adverse civil consequences, principles of natural justice like notice and hearing would have to be complied with. Non-compliance to the principles of natural justice would impeach the decision making process, rendering the decision invalid in law - Rejection of Declaration under the said scheme filed by the petitioner without rendering a personal hearing to the petitioner, leads to adverse civil consequences for the petitioner as the petitioner would have to face the consequences of enquiry or investigation or audit - A perusal of section 123(c) of said Scheme also clearly indicates that where an enquiry or investigation or audit is pending against the declarant, the amount of duty payable under any of the indirect tax enactment which has been quantified would fall within term “tax dues” under the said section 123(c) of the said scheme.
Result: Writ Petition allowed.
JUDGMENT :
R.D. DHANUKA, J.
1. Rule. Mr. Jetly, learned senior counsel for the respondents waives service. By consent of parties, writ petition is heard finally.
2. By this petition filed under Article 226 of the Constitution of India, the petitioner prays for a writ of certiorari for quashing and setting aside the order of Designated Committee-I (comprised of respondent nos. 2 and 3) communicated through email dated 14th February, 2020 whereby rejecting the SVLDRS-1 Declaration dated 30th December, 2019 filed by the petitioner. The petitioner also prays that the proviso to Rule 6(2) read with Rule 6(3) of the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 (for short ‘the said Scheme’) be read down and to accept the Declaration filed by the petitioner as the valid Declaration under Section 125 of the said Scheme and for other reliefs.
3. Some of the relevant facts for the purpose of deciding this writ petition.
4. The petitioner is engaged in providing construction services of commercial or industrial buildings and civil structures, other than residential complexes. It is the case of the petitioner that in the month of February 2019, an enquiry for investigation was narrated by the Directorate General of GST Intelligence, Zonal Unit, Mumbai. During the course of the investigation, the petitioner submitted copies of the documents for the period 2013-14 (from October 2013 to March 2014), 2014-15, 2015-16 and 2016-17 (from April to June 2017), on demand, to the officers of the respondent no. 3. Mohd. Azhar Ali, Director of the petitioner tendered his statement before the Senior Intelligence officer of the respondent no. 3 on 28th February, 2019. It is the case of the petitioner that during the course of the said statement, the Director of the petitioner declared and admitted the total tax liability of Rs. 1,28,88,541/-. A portion of the said amount was subsequently confirmed as Rs. 1,26,62,148/- in the show-cause notice dated 26th September, 2020. The petitioner paid an amount of Rs. 30 lakhs prior to the recording of the said statement dated 28th February, 2019 and Rs. 60 lakhs after recording the said statement in two installments.
5. On 5th August, 2019, the Central Government launched the said Scheme after its incorporation as the Chapter V of the Finance (No. 2) Act, 2019. The said Scheme was brought into force w.e.f. 1st September, 2019.
6. The Central Board of Indirect Taxes and Customs (for short ‘CBIC’) issued a circular dated 27th August, 2019 explaining and qualifying the said Scheme. The petitioner proposed to avail the benefits i.e. reliefs in tax dues, interest and penalty etc and filed a Declaration dated 30th December, 2019 under the category - Investigation or Enquiry and sub-category - Investigation by DGGI for the duty type-Service Tax. It is the case of the petitioner that when the petitioner filed the said Declaration dated 30th December, 2019, the enquiry or investigation was still in progress against the petitioner and was pending against the petitioner. The amount was clearly included within the scope of tax dues.
7. In the said Declaration filed in Form SVLDRS-1 by the petitioner, an amount of Rs. 1,28,88,541/- was declared by the petitioner as tax dues which was declared and admitted in the statement of Mohd. Azhar Ali, Director recorded on 28th February, 2019. The petitioner showed a deposit of Rs. 90 lakhs against the said tax dues of Rs. 1,28,88,541/- and also showed the ‘amount payable’ as defined under the provisions of Clause (e) of Section 121 of the Scheme, 2019 i.e. tax dues less tax less tax relief [@ 50% of tax dues] after adjusting the said deposit of Rs. 90,00,000/- and declared as ‘0’ zero. It is the case of the petitioner that as per the said Scheme, the petitioner was required to pay an amount of Rs. 64,44,270/- against which the petitioner had already paid a sum of Rs. 90 lakhs i.e. sum of Rs. 25,55,729/- in the excess of the final amount payable by the petitioner which amount is n
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