Sir Gujan Builder Vs Designated Committee and Others (Madras High Court)
Summary: The Madras High Court considered a writ petition filed by M/s. Sir Gujan Builder challenging a service tax show cause notice dated 26 November 2019 and seeking issuance of a discharge certificate in Form SVLDRS-4 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The petitioner had opted for settlement of its service tax liability under the scheme and submitted the prescribed declaration. Following issuance of the relevant forms and determination of the payable amount, the petitioner made the required payment. Although an earlier electronic communication indicated an outstanding liability of Rs.37,89,582/-, subsequent clarification resulted in the amount payable being recorded as NIL by the Designated Committee.
The petitioner contended that the settlement proceedings had been completed by 14 July 2020 and that the remaining requirement was issuance of the discharge certificate in Form SVLDRS-4. A departmental electronic record dated 14 October 2020 reflected the NIL liability. However, when the petitioner requested the discharge certificate on 7 February 2022, the Designated Committee rejected the request on 22 February 2022. The rejection stated that manual processing was unavailable and referred to Board Instruction No.01/2021-CX dated 17 March 2021, under which manual processing was said to be permitted only in cases remanded by a High Court following a decision in favour of the declarant.
The High Court rejected the Department’s justification. It held that adopting an alternative processing mechanism, whether manual or otherwise, was an internal administrative matter for the Designated Committee. The Committee was not required to await a judicial direction before processing the request manually. Since the petitioner’s liability had already been settled and the amount payable stood recorded as NIL, the refusal to issue the discharge certificate on the stated ground was unsustainable.
Accordingly, the High Court set aside the rejection order dated 22 February 2022 and directed the Designated Committee to process the petitioner’s request dated 7 February 2022 manually and issue the discharge certificate within four weeks from receipt of the order. As a consequence, the Court also set aside the service tax show cause notice dated 26 November 2019. The writ petition was disposed of without costs, and the connected miscellaneous petition was closed.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The prayer sought for herein is for a Writ of Certiorarified Mandamus callingnd for the records relating to the show cause notice issued by the 2 respondent bearing No. SCN No.31/2019 dated 26.11.2019 and quash the same and consequently directs the 1 respondent to issue a discharge certificate in form SVLDRS-4 for I.D.2412190000601 dated 24.12.2019 as the requisite liability of more than 50 per cent of the tax dues as per the said scheme has already been paid by the petitioner and quash the same.
2. The petitioner, in respect of the due payable by way of service tax, opted to avail the Sabka Vishwas Scheme, 2019 where Form-1 was made pursuant to which Form-2 has been issued and based on which the amount determined has been paid and though the amount determined has been paid, the earlier e-communication suggested that still a sum of Rs.37,89,582/- has to be paid. When that was clarified by the petitioner, ultimately the amount payable by the petitioner has become NIL and this has also been disclosed by the Designated Committee under the Scheme.
3. Therefore, when all these proceedings have been completed as early as on 14.07.2020, the only issue left is to issue Discharge Certificate under Form-4. When this was asked for by the petitioner by a request dated 07.02.2022, the same has been rejected by the Designated Committee by order dated 22.02.2022 in the following terms.
“Kind reference invited to your letter dated 07.02.2022 on above subject wherein you had requested for issue of Discharge Certificate (SVLDRS 4).
The SVLDRS 4 was not issued by the Designated Committee at that point of time. Since there is no provision to manually process it now, your request to issue discharge certificate cannot be acceded to. Moreover, the only situation where manual processing is possible as per Board Instruction No.01/2021-CX dated 17.03.2021 covers only those cases where the High Court has decided the case in favour of the declarant and remanded the matter back to the concerned Designated Committee for fresh decision. Hence your request for issue of discharge certificate now is rejected.”
4. In view of the delay in giving the Discharge Certificate in Form-4 because of the said denial letter dated 22.02.2022, the Revenue has issued a show cause notice dated 26.11.2019 and that show cause notice is still pending. Therefore, challenging the earlier show cause notice dated 26.11.2019 and the present rejection order dated 22.02.2022 this writ petition has been filed.
5. Heard Mr. G. Natarajan, learned counsel appearing for the petitioner who 3 / 6 would submit that, the entire amount as determined has been paid and the payment has been shown as NIL and in this regard the document taken from the website of the Sabka Vishwas Designated Committee dated 14.10.2020 itself has been filed before this Court and thereafter when a request has been made by the petitioner to issue Discharge Certificate in Form-4, the same has been rejected on the peculiar reason stating that manually it cannot be processed and a court order has to be obtained.
6. Mrs. Hema Muralikrishnan, learned Senior Standing Counsel appearing on behalf of the respondents, though made some attempt to sustain the order of rejection dated 22.02.2022, I am not impressed with the same because, the reason cited by the respondent through the order dated 22.02.2022 that, manual process can be undertaken only pursuant to the order passed in this regard by the court of Law. The said reason cited by the respondents which is impugned herein dated 22.02.2022 is totally unsustainable as it is an internal issue of the Designated Committee under the Scheme to go for an alternative mechanism to do it either manually or otherwise. Therefore, for such process, they need not wait for an order from this Court.
7. Nevertheless, since the order dated 22.02.2022 has been passed citing the said reason, which is under challenge in this writ petition, this Court has necessarily 4 / 6 to show its indulgence and accordingly this Court is inclined to dispose of this writ petition with the following order.
- That the impugned order dated 22.02.2022 is set aside and a direction is given to the Designated Committee to manually process the request of the petitioner dated 07.02.2022 and issue a Discharge Certificate and needful as indicated above shall be undertaken within four weeks from the date of receipt of a copy of this order.
- As a sequel, the show cause notice issued by the Revenue dated 26.11.2019 also is liable to be set aside and it is accordingly set aside.
8. With the above directions, this writ petition is disposed of. No costs. Consequently, connected miscellaneous petition is closed.
