Kuber Health Food And Allied Vs Union of India (Bombay High Court)
High Court Allows SVLDR Scheme Benefit Despite Higher Tax Quantification Declared Out of Abundant Caution- Admitted Tax Liability Before Cut-Off Date Upholds Eligibility for Settlement Scheme, Emphasizing the Objective of Reducing Litigation
Summary of Judgment
This petition raises the issue of eligibility under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) in cases where tax liability was admitted before the stipulated cut-of date (June 30, 2019), but the show-cause notice quantifying the demand was issued afterward. The key points of the petition are summarized as follows:
1. Background: The petitioner is a registered service provider under the Finance Act, 1994, engaged in “Outdoor Catering Services and Manpower Supply Services.”
2. Investigation: During an investigation in April 2018, the petitioner admitted a service tax liability of ₹1,39,58,752 for the period 2014-2017 in a statement recorded on April 16, 2019, and paid ₹20,08,662 for the year 2013-2014.
3. SVLDRS Application: The petitioner applied for the scheme, disclosing an amount of ₹1,50,37,871 as a precautionary measure, based on the show-cause notice issued on October 16, 2019.
4. Rejection of Application: The authorities rejected the petitioner’s application under the SVLDRS, stating that quantification of liability occurred after the cut-of date of June 30, 2019
Petitioner’s Stand:
1. Quantification of the admitted liability occurred during the investigation on April 16, 2019, which is before the cut-of date, meeting the eligibility requirements.
2. The mention of a higher amount in the application was an act of caution, and no prejudice was caused to the authorities since the liability had been admitted earlier.
3. Reliance was placed on clarifications by the Ministry of Finance (dated August 27, 2019) and precedents from various High Courts where similar facts warranted eligibility under the scheme.
Respondent’s Stand:
1. The quantification in the SVLDRS application was based on the show-cause notice issued after the cut-of date, making the petitioner ineligible under Section 125(1)(e) of the scheme.
Court’s Analysis:
