(1)WP-696-2-21.doc

JPP

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

WRIT PETITION NO.696 OF 2021

Future Enterprises Limited

]

..

Petitioner

vs.

Union of India & Ors.

]

..

Respondents

Mr.Ashish Kamat a/w Akshay Puranik, Deepak Deshmukh and Vivek

Dwivedi i/b Naik Naik & Co. for Petitioner.

Mr.J.B. Mishra, for Respondents.

CORAM :

S.V. GANGAPURWALA &

M.G.SEWLIKAR, JJ

DATE :

19TH APRIL, 2022.

P.C.

1]

This writ petition assailed the order rejecting the declaration of

the petitioner under the Sabka Vishwas (Legacy Dispute Resolution)

Scheme 2019 (for short, “the Scheme”).

2]

Mr. Kamat, learned Counsel for the petitioner submits that the

petitioner is member of Retailers Association of India (for short, “RAI”)

which had filed writ petition before this Court challenging the validity of

levy of service tax on “Renting of Immovable Property Services”. The

writ petition was dismissed. The RAI filed the appeal before the Apex

Court. The Apex Court by its order dated 14^th October 2008 was

pleased to grant interim relief in favour of petitioner. The Apex Court

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(1)WP-696-2-21.doc

directed to deposit with the concerned department 50% of the arrears

towards the said tax and file an undertaking to pay the balance arrears

of service tax as may be directed at the time of final disposal of the

appeal. In pursuant to the interim order the petitioner deposited 50% of

the amount of Service Tax and had also filed affidavit and undertaking

before the Apex Court. The learned Counsel for the petitioner submits

that the declaration is rejected only on the ground that the appeal

pending before the Apex Court is not pursuant to the show cause notice

issued by the Department. The learned Counsel for the petitioners

relies on the Circular No.1073/06/2019.CX dated 29^th October 2019 and

submits that petitioner would be eligible to apply under the Scheme.

3]

Mr.Mishra, learned Advocate for the respondents submits that

the petitioner is not served with show-cause notice. The appeal pending

before the Apex Court is not pursuant to the show-cause notice. The

petitioner is service recipient and not the service provider. Service

provider is only liable to discharge the service charge tax liability.

4]

We have heard the learned Counsel for the parties.

5]

The Circular No. 1073/06/2019.CX more particularly clause (5) of

the same reads thus :

“(v)In many cases the assets of a tax defaulter are

taken over by an Asset Reconstruction Company

(ARC), and the department asks the ARCs to pay the

outstanding dues. In another case, M/s. RIICO, a PSU

of State of Rajasthan, has taken physical possession

of the fixed assets of some of its borrowers who also

happen to be tax defaulters. They have reported that

they may be able to realise their dues, if they are

allowed to settle the tax dues under the Scheme, and

thereby removing an encumbrance on the disposal of

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the fixed assets. Similarly, M/s. Retailers Association of

India have represented that in many cases, department

has initiated proceedings against lessors for non-

payment of service tax on rent on immovable property

rented by their members. Hon’ble Supreme Court has

allowed the lessees to file a Civil Appeal challenging

the applicability of service tax in such matters, subject

to the condition that they deposit appropriate pre-

deposit as well as the remaining dues, if the case is

decided against them eventually. It is clarified that such

persons are allowed to file a declaration under the

Scheme and avail the benefits. The remaining

conditions of the Scheme such as withdrawal of

pending cases etc., apart from payment of dues as

determined by the designated committee, will still need

to be complied by them.”

6]

The circular clarifies that the Retailer Association of India has

represented that the department has initiated proceedings against

lessors for non-payment of service tax on rent o