Taxpayers are ineligible for relief under the SVLDRS unless the duty amount has been quantified by the department, rather than the taxpayer unilaterally.

JUDGMENT

[VIA VIDEO CONFERENCING]

Sanjeev Narula (Oral):

CM APPL. 7007/2021

1. Allowed, subject to all just exceptions.

2. Application is disposed of.

W.P.(C) 2408/2021 & CM APPL. 7008/2021

3. The Petitioner, aggrieved with the rejection of its declaration under the amnesty scheme - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 [hereinafter referred to as `SVLDRS'] for settlement of the service tax dues, by way of the instant petition under Article 226 of the Constitution of India, seeks direction to the respondents to issue discharge certificate under SVLDRS. Besides, relief is also sought for quashing the Demand-cum-Show Cause Notice No. 61/2019-20 dated 20th March, 2020 issued by Respondent No. 2 in respect of the period in dispute [hereinafter referred to as `SCN'].

4. Briefly stated, the petitioner, being proprietor of M/S. Syona Spa, is in the business of providing health club and fitness centre services. An investigation was initiated by the Anti-Evasion Group-4, Central Excise and Service Tax Department, in respect of service tax dues for the period of 2014-15 to June 2017. Vide letter dated 10.05.2019, summons were issued to the Petitioner. In reaction thereto, Petitioner deposited service tax of Rs. 20,08,334/- vide challans dated 10.05.2019 and 14.05.2019. Thereafter, by way of letters dated 21.05.2019 and 18.06.2019, the Petitioner sent its response to the summons, submitting, inter alia, month-wise receipts of service tax. Petitioner claims that vide the afore-noted communication dated 18.06.2019, it has quantified the service tax payable for the period 2014-15 to June 2017 as Rs. 20,08, 334/- for the period 2014-15 to June 2017.

5. On 01.08.2019, the Government notified the SVLDRS vide Sections 120 to Section 134 of the Finance (No.2) Act, 2019.

6. The Petitioner sought to take benefit of SVLDRS and filed online declaration, under FORM SVLDRS-1 [ARN LD0912190001228] on 09.12.2019. Therein, against "Quantified Amount details", the Petitioner declared that duty/tax of Rs. 20,08,334/- was quantified, as declared by it in its letter dated 18.06.2019. The said application/declaration under FORM SVLDRS-1 was rejected on the ground of ineligibility, with the remarks - "Demand has neither been quantified nor has been communicated to the assessee" and "Submit SVLDRS-4 of main noticee". In this backdrop, the present petition has been filed.

7. Mr. Sharma, counsel for the petitioner, submits that the decision of the authority is arbitrary and unreasonable as the petitioner's eligibility under SVLDRS has been wrongly assessed by ignoring the terms of the scheme. The Petitioner has applied for tax relief in accordance with the scheme, and in consonance with the prescribed SVLDRS Rules, 2019, which were issued vide Notification No. OS/2019 Central Excise-NT dated 21.08.2019. He also argues that Petitioner's eligibility to file the declaration under SVLDRS is clarified beyond doubt vide Paragraph 10(g) of the CBIC Circular No. 107114/2019- CX.8 dated 27.08.2019 wherein it has been stipulated that for eligibility under SVLDRS, the term "quantified" includes written communication by a letter intimating duty demand; or duty liability admitted by the person during enquiry, investigation etc. The petitioner had qualified the said amount in dispute by way of communication dated 18.06.2019, much before the `relevant date' under SVLDRS i.e. 30.07.2019. This communication made the petitioner an eligible declarant under the scheme as the amount stood quantified on the `relevant date'. Mr. Sharma also argues that the SCN inter alia captures the Petitioner's