Case Law Details
National Centre for the Performing Arts Vs Union of India (Bombay High Court)
It is not in dispute that the Petitioner has, prior to the issuance of the show cause notice, paid an amount of Rs.1,49,35,618/- electronically out of which a sum of Rs.1,09,06,948/- was deposited under the Accounting Code 00441480 as tax receipts and Rs.40,28,670/- was deposited under Accounting Code 00441481 towards interest under other receipts. That, during the pendency of the show cause notice, Petitioner had also requested for change of Accounting Code in respect of the interest amount to the Accounting Code relevant to tax receipts which request was also pending when the SVLDR Scheme was notified pursuant to which the Petitioner filed a declaration in Form SVLDRS-1 to avail of the scheme. The Designated Committee has issued form SVLDRS-3 without adjusting the amount of interest as tax dues, the reason being that “any amount paid” referred to in Section 124(2) referred to the tax dues as contained in Section 123(b) of the Finance Act which refers to the amount of duty as defined in Section 121(d). No doubt, Section 123(b) defines tax dues that refers to a show cause notice to be the amount of duty stated to be payable by the declarant in the said notice and that amount of duty defined in Section 121(d) means the amount of central excise duty, service tax and the cess payable under the indirect tax enactment, however, in our view, any amount paid in Section 124(2) does not distinguish between amount paid under different heads. It envisages two kinds of deductions – any pre-deposit made at any stage of the appellate proceedings under the indirect tax enactment or any deposit made during enquiry, investigation or audit. Both these species need to be deducted while finalizing the computation. The provision only talks of an amount irrespective of whether it has been paid as tax or interest or penalty. Infact, the Respondents in their affidavit have nowhere disputed this. The SVLDR Scheme is a beneficial legislation and as noted above, not only for liquidation of legacy disputes for the benefit of the tax payers but also for recovery of unpaid taxes: it is a scheme for amicable resolution of disputes and in the interest of revenue. The Statement of Objects and Reasons clearly provide that the declarant would be entitled to benefits in the form of waiver of interest, fine, penalty and also immunity from prosecution. Keeping in mind these objectives, failure to adjust interest paid by the Petitioner, in our view, appears to be hyper-technical and should not come in the way of implementation of schemes of this nature.
Petitioner cannot be deprived of the benefits of this scheme just because the amount of interest was deposited under Accounting Code 00441481 (Other Receipts (interest)) and not under 00441480 in respect of tax receipts which change of Accounting Code was pending with the Respondents Authorities at the time of filing of Form SVLDRS-1 by the Petitioner. Petitioner, cannot be penalized for depositing the amount under different head. Once the provision speaks of “any amount paid” without distinguishing between the heads of tax or between tax, interest or penalty, in our view, the provision mandates the deduction of the amounts deposited prior to issuance of the show cause notice. As rightly observed by the Madras High Court in M/s Vamsee Overseas Marine Private Limited (supra) the object of the scheme should not be lost sight of, as the scheme has itself been formulated for the smooth settlement of disputes. The interpretation of the provisions thereof should be to carry forward the object rather than to frustrate the same giving rise to more litigation. In our view, had the Designated Committee taken a pragmatic view, more so, in the light of the law settled by atleast three High Courts, this litigation was clearly avoidable.
Therefore, the issue is not whether the elements of pre-deposit and deposit are common but the issue is whether interest component deposited by the Petitioner can be treated to be “any amount paid”. With respect to submissions with regard to Section 121(u) of the Finance Act and Section 35F of the Central Excise Act are concerned, that in our view are not germane for the issue at hand, although there is no quarrel with the provisions as it is. With respect to the submission that since the government has allowed waiver of entire interest payable in terms of Central Excise / Service Tax Act it would be illogical to provide for deduction of interest paid from the principal amount of duty / tax required to be paid, as already observed above, the phrase “any amount paid” in Section 124(2) does not discriminate between the amount of tax, duty or interest or penalty and would include the same, considering the beneficent nature of the legislation.
30 In view of the above discussion and the law laid down by three High Courts of our country including this Court, where “any amount paid” in Section 124 (2) has been interpreted to include the amount of interest that has been paid by the declarant, we have no hesitation in holding that the Designated Committee ought to have given due credit of the sum of Rs. 40,28,670/- as interest deposited by Petitioner was prior to the issuance of the Show Cause Notice.
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