IMPORTANT POINT
The court established that quantification of tax dues before the cut-off date is sufficient for eligibility under the Sabka Vishwas Scheme, necessitating a liberal interpretation of the scheme's provisions.

JUDGMENT :

(K.R. Shriram, J.)

1 Director of petitioner one Muthukrishnan Iyyappan appeared as party in person. Therefore, we requested Mr. Raichandani to be the Amicus Curiae. Before we proceed with the case, we must express our appreciation for the assistance rendered and endeavour put forth by Mr. Raichandani, learned Amicus Curiae, for it has been of immense value in rendering the judgment.

2 On or about 5th April 2019 petitioner received an email from GST audit team stating that there was a service tax paid and payable mismatch for Financial Years 2014-2015 to 2017-2018 and directed petitioner to produce documents for the said period. Petitioner was also requested to pay the difference immediately. The difference indicated was only Rs.1/- and we are unable to understand why petitioner did not choose to pay the amount and close the file. Instead, as we would note, petitioner has willingly chosen to take an arduous route and is now ready and willing to pay a sum of Rs.22,00,414/- as service tax for Financial Years 2014-2015, 2015- 2016, 2016-2017 and 2017-2018.

3 It is stated in the petition that petitioner conducted an internal audit and found that the amount of Rs.22,00,414/- was short paid. Petitioner thereafter, decided to take advantage of Sabka Vishwas Legacy Dispute Resolution Scheme (SVLDRS) and filed a declaration in Form-1 under the voluntary disclosure category declaring a sum of Rs.16,04,367/-. This declaration was filed on 6th November 2019. This was accepted by respondents and petitioner was called upon to make the payment within 30 days. Petitioner did not make the payment but instead filed another declaration dated 30th December 2019 under the category - Investigation, Enquiry or Audit, sub-category - Investigation by Commissionerate and declared the amount of Rs.22,00,414/- as the quantified amount.

4 This declaration was rejected by respondents on the ground that as per respondents' records the tax dues had not been quantified before 30th June 2019 and hence, it is not covered under the investigation category. The rejection was on the ground of ineligibility and the remarks read as under :

As per records, tax dues has not been quantified before 30.6.19, hence it is not covered under 'Investigation' category. It is ineligible as per Section 125(1)(e) read with Sec 121(r) of the Scheme. Further, as per Section 127 (2) and (3), only in case of difference in tax dues declared & 'estimates' arrived by Designated Committee, PH may be granted. Hence, your request for PH could not be accepted.

5 It is petitioner’s case that by a letter dated 6th May 2019 petitioner informed respondents that the service tax for Financial Year 2014-2015 upto 2017-2018 was short paid due to a calculation error and the amount totals to Rs.22,00,414/-. A copy of the letter dated 6th May 2019, for ease of reference, is scanned and reproduced hereinbelow :

6 As regards the hand written notes, petitioner stated that it was written by an officer to whom the letter was delivered. The written note states “please provide the copy of full Balance Sheet, P & L A/c., ITR - filed ST-3, and other relevant documents within a week time”. Petitioner received an email dated 5th August 2019 from respondents calling upon petitioner to pay the short payment of service tax amounting to Rs.22,00,414/- together with interest and penalty.

7 Mr. Raichandani, relying upon a judgment of this Court in Thought Blurb v/s. Union of India and Ors., 2020-TIOL-1813-HC-MUM-ST and Joseph Daniel Massey v/s. Union of India and Ors., 2021-TIOL-217-HC-MUM-ST submitted that the fact that petitioner had quantified the amount payable before the cut off date of 30th June 2019 read with the email dated 5th August 2019, the Court should hold that petitioner’s tax dues were quantified on or before 30th June 2019.

8 Ms. Date opposed the petition and submitted, relying on a judgment of the Delhi High Court in Chaque Jour HR Services Pvt. Ltd. v/s. Union of India, 2020 (9) TMI 9 (Delhi) that