Schlumberger Solutions Private Limited Vs Commissioner Central GST (Punjab and Haryana High Court)
Admittedly, the petitioner has deposited amounts of Rs.2,29,61,536/-and further sum of Rs.1,16,51,272/- on account of interest and Rs.34,44,227/- as penalty, even prior to issuance of show cause notice. The question that arises for adjudication is as to whether the petitioner is entitled for credit of amount deposited under the head of interest and penalty while quantifying the amount payable under the SVLDR scheme.
A bare reading of Section 124(2) reveals that the relief calculated under Section 124(1) is subject to the condition that any amount paid during the enquiry, investigation or audit has to be deducted when issuing the statement indicating the amount payable by the declarant. The bare provision talks of ‘any amount paid’, the same does not distinguish between the amounts paid under different heads. It clearly envisages two kinds of deductions firstly any pre-deposit made at any stage of appellate proceedings under the indirect tax enactment and secondly, any deposit made during enquiry, investigation or audit. Both these species of ‘pre-deposit’ need to be deducted while finalizing the computation.
Amount deposited by the petitioner falls in the second category. The provision only talks of amount irrespective of whether it has been paid as tax or interest or penalty. Thus, the view taken by the Designated Committee cannot be sustained. There is another side to the story. Had the petitioner remitted the entire amount paid by him towards tax, the respondents would have given credit of entire amount and his interest liability would have been waived off as well. The petitioner cannot be punished for depositing the amount under different heads once the provision mandates to discount the amount paid during the investigation dehors the head it has been deposited under.
The present petition is allowed. Resultantly: (i) the comments of Designated Committee informs SVLDRS-2 and SVLDRS-3 are quashed : (ii) Designated Committee is directed to re-consider the claim of the petitioner within two weeks from the receipt of certified copy of the order by adjusting amounts paid towards interest and penalty, in accordance with law and the petitioner is directed to make the payment within two weeks from the date Designated Committee issues SVLDRS-3.
FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURT
The petitioner is an assessee for the purposes of service tax. Petitioner was subjected to audit by the authorities under Goods and Service Tax for the period 2013-14 to 2016-17. During the course of audit, certain objections were raised with respect to the petitioner availing cenvat credit on trading of goods. The petitioner paid an amount of Rs.2,29,61,536/- towards service tax. Apart from this, amounts of Rs.1,16,51,272/- and Rs.24,44,227/- were paid as interest and penalty respectively.
The petitioner was served with a show cause notice dated 12.04.2019 whereby further amount of Rs.9,86,53,074/- was sought to be recovered on account of cenvat credit. This amount included interest and penalty as well. Before the proceedings on the aforesaid show cause notice could proceed further, an amnesty scheme by way of Finance (No.2) Act, 2019 was introduced by the Central Government. The main objective of the scheme is to provide for the settlement of pending disputes related to indirect taxes. The petitioner being eligible under the said scheme availed the same by making declaration in Form SVLDRS-1. As per the petitioner, his declaration was accepted though with a variation in the computation of amount payable. Designated Committee, i.e. respondent No.2 disagreeing with the petitioner’s computation issued Form SVLDRS-2 on 28.01.2020 wherein the difference in the amount payable was calculated to be Rs.1,50,95,499. The computation given by Designated Committee in SVLDRS-2 reads as under:-
