Munish Rajkumar Mahajan Vs Union of India (Bombay High Court)
This Court held that having regard to the objective of the scheme, in a case of this nature, a reasonable and pragmatic approach has to be adopted so that a declarant can avail the benefits of the scheme; a declarant who seeks benefit under the scheme cannot be put in a worse off condition than he was before making declaration under the scheme. That would defeat the very purpose of the scheme. In our view, the principles laid down by this Court in case of Jyoti Plastic Works Pvt. Ltd. (supra) would apply to the facts of this case. In this case, the facts are even better though the facts before this Court in case of Jyoti Plastic Works Pvt. Ltd. (supra). The respondent no.2 had already adverted to the show cause notice for the larger period and reply of petitioner and had determined tax dues which was the basis adopted by the petitioner rightly by filing the said SVLDRS-1 under the category ‘arrears’.
This Court in case of Morde Foods Pvt. Ltd. & Anr. (supra) after considering the reply to the question nos.5 and 6 of ‘Frequently Asked Questions’ and after adverting the judgment of this Court in case of Thought Blurb (supra) and Jyoti Plastic Works Pvt. Ltd. (supra) quashed and set aside the order passed by the authority and remanded back the matter to the authority to take a fresh decision in accordance with law. This Court in the said judgment held that while the declarant would not be eligible under the litigation category but once the order in appeal is passed (which presumably is post 30.06.2019), the declarant can file a declaration under the arrears category provided the appeal has attained finality or further appeal period is over or that the declarant gives an undertaking that he would not file any further appeal.
It is held that final hearing of the appeal on or before 30th day of June, 2019 is not the only decisive factor in determining eligibility. According to the Board, post 30.06.2019, the declarant can still make a declaration under the arrears category once the order in appeal is passed whereby the matter has attained finality or the declarant gives an undertaking that he would not file any further appeal or the period for filing further appeal is over. In the facts of this case also, the petitioner did not file any appeal against the said assessment order. The said assessment order has thus attained finality crystallizing the tax dues of the petitioner. The principles laid down by this Court in case of Morde Foods Pvt. Ltd. & Anr. (supra) apply to the facts of this case.
This Court in case of Thought Blurb (supra) has considered the entire scheme SVLDRS threadbare and has also considered the objects, purpose and intent for framing the said scheme by the Central Government. This Court has considered the declaration made by the Hon’ble Finance Minister clearly deducible from the statement of object and reasons, the scheme as one time measure for liquidation of past disputes of central excise and service tax as well as to ensure disclosure of unpaid taxes by a person eligible to make a declaration. The basic thrust of the scheme is to unload the baggage of pending litigations centering around service tax and excise duty. The focus is to unload this baggage of pre-GST regime and allow business to move ahead.
In our view, the impugned order is contrary to the object, the purpose and the intent of the Central Government to frame the said scheme as one time measure for liquidation of past disputes of central excise and service tax as well as to ensure disclosure of unpaid taxes by a person eligible to make a declaration and the basic thrust of the scheme is to unload the baggage of pending litigations centering around service tax and excise duty and deserves to be quashed and set aside.
In our view, the petitioner had rightly filed the said declaration form considering the tax dues as Rs.39,47,420/- i.e. the amount of demand confirmed in the Order-in Original dated 23rd December, 2019 and had rightly computed an amount of Rs.15,78,968/-as estimated/determined amount payable i.e. by applying 40% under section 124(c)(i) Finance (No.2) Act, 2019 on the said dues of Rs.39,47,420/-.
We accordingly pass the following order :-(i) Writ petition is allowed in terms of prayer clauses (a) and (b) The petitioner is granted two weeks time for making payment of the said amount of Rs.15,78,968/-. The respondents to issue discharge certificate within thirty days from the date of the petitioner paying the amount.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
Rule. Mr.Mishra, learned counsel for the respondents waives service. By consent of parties, petition is heard finally.
2. By this petition filed under Article 226 of the Constitution of India, the petitioner seeks a writ of mandamus, directing the Designated Committee under SVLDR Scheme to consider the tax dues as Rs.39,47,420/- i.e. the amount of demand confirmed, in the Order-in-Original dated 23rd December 2019 and declared in the SVLDRS-1 and compute an amount of Rs.15,78,968/- as the estimated/determined amount payable i.e. by applying 40% under Section 124(c)(i) of the Finance (No.2) Act, 2019 on the said dues of Rs.39,47,420/-. Some of the relevant facts for the purpose of deciding this petition are as under :-
3. The petitioner is engaged in providing security and detective agency services and was holding necessary registration under Service Tax law and now under GST law. The petitioner was paying appropriate service tax on the said services of security and detective agency provided by them.
4. It is the case of the respondents that during the verification of the data received from third party, it was observed that there was an apparent mismatch in the payment of Service Tax and the turnover of the assessee. As per third party data, Income Tax Department viz. ITR/ TDS data (Tax deducted at Source in Form-26AS), it was observed that the petitioner had shown income as per ITR/TDS for the period of 201314 as under:-
