The court confirmed a tax demand pending finalization qualifies for relief under the Litigation category rather than the Arrears category, entitling the petitioner to a higher relief percentage under the Sabka Vishwas Scheme.

JUDGMENT :

Advait M. Sethna, J.

1. This is a Petition filed under Article 226 of the Constitution of India. The Petitioner prays, mainly, for quashing and setting aside form SVLDRS-3 issued to the Petitioner under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (“said Scheme” for short) demanding an amount of Rs.12,93,408/- under Arrears category. This forms the subject matter of challenge in the present Petition. The substantive prayers read thus: -

“(b) to issue a Writ of Certiorari or any other similar writ or order under Article 226 of the Constitution of India calling for the records and proceedings from the office of the Second Respondent and after perusing and examining the legality thereof quash and set aside the Form No. SVLDRS-3 issued to the petitioners.

(Exhibit-J)

(c) to issue a writ of mandamus or similar writ or order or directions under Article 226 of the Constitution of India, direct the second Respondent to determine the correct amount considering the declaration filed under category “litigation’ or in the alternative, to quantify the amount payable as Rs.31,86,152.40 under the “amount in arrears” category ignoring the directives contained in the CBIC circular dated 25.09.19”

2. Heard Ms. Kiran Doiphode, learned counsel for the Petitioner and Mr. Karan Adik, learned counsel for the Respondents.

3. Rule. The rule is made returnable forthwith with the consent of the parties.

4. The fulcrum of the dispute lies in the Respondent contending that the given case would be covered under the Arrears category under Section 124 (1) (c) of the Finance Act, 2019. (“Finance Act” for short) However, the Petitioner would urge that the show cause notice dated 6 January 1993 was pending before the commissioner of Central Excise/GST in terms of an order of remand dated 30 December 2010 passed by the erstwhile Central Excise and Gold Control Appellate Tribunal, Mumbai (“Tribunal” for short). Therefore, according to the Petitioner, these proceedings squarely fall under the litigation category as being covered under Section 124(1) (a) of the Finance Act. Therefore, the Petitioner having paid an amount of Rs.10 lakhs towards pre-deposit as claimed by it, duly adjusted by the second Respondent in terms of Section 124 (2) of the Finance Act, under Form SVLDRS-2, the Form SVLDRS-3 issued by the second Respondent quantifying the tax/duty at Rs. 12,93,408/- is erroneous and legally untenable.

Factual Matrix:

5. The facts necessary for adjudicating the present Petition are set out below:-

6. The Petitioner claims to be the proprietor of M/s. Unique Enterprises engaged in the manufacturing of condensers and cooling coils.

7. A Show Cause Notice dated 6 January 1993 was issued to the Petitioner by the Commissioner of Service Tax and Central Excise, Mumbai-I demanding Central Excise duty of Rs. 39,53,517/-. Penalty under Rule 173Q read with 9(2), 52A, 209A, 210 and 226 of the erstwhile Central Excise Rules, 1944 was also proposed to be levied on the Petitioner.

8. Pursuant to the above, an order in original dated 19 December 1997 was issued by the adjudicating authority confirming the demand of Central Excise Duty of Rs.39,53,517/-, penalty of Rs.50,00,000/-, fine of Rs.1,00,000/- and further fine of Rs.30,00,000/- on the Petitioner in light of the reasons set out in the order in original.

9. The Petitioner assailed the order in original before the Tribunal, who by its order dated 29 July 1998 directed the Petitioner to furnish pre-deposit of Rs.10,00,000/- which the Petitioner claims to have duly paid.

10. The Tribunal vide an order dated 30 December 2010 remanded the proceedings for re-