Case Law Details
Sai Sun Outsourcing Services Private Ltd. Vs Union of India & another (Madhya Pradesh HC)
Petitioner filed two applications, on 28.12.2019 and 14.01.2020 to avail the benefit of SVLDRS Scheme which was processed on the basis of correctness of “Tax Dues” declared in the application with reference to the amount of duty quantified in the reference document mentioned in the said declaration. As there were application wherein the amount of ‘Tax Dues’ declared by the declarant in their SVLDRS application were not matching with the amount of duty quantified in the reference document issued on or before 30.06.2019, there was delay in proceessing. It is urged that the second application dated 14.01.2020 was processed early because the amount of Tax due declared therein matched with the amount of duty quantified in the departmental audit spot memo No.228 dated 17.05.2019. And being to be correctly filed, the amount of Rs.74423447.50 payable by the petitioner after allowing the benefit of SVLDRS was intimated vide SVLDRS–3 form issued on 10.02.2020. It is urged that with the acceptance of declared SVLDRS application dated 17.01.2020, the earlier application which required and was under process to match out the amount of Tax Due declared with the amount of duty quantified with reference document issued on or before 30.06.2019, therefore, rendered redundant.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
Petitioner besides seeking quashing of the order rejecting the application dated 28.12.2019 and accepting the application dated 14.01.2020 under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 seeks direction to consider said application and raise correct demand by issuing SLVDRS 3 for proper settlement of dispute and further direction to defreeze the accounts to enable the petitioner to make payment of demand raised under the Scheme.
2. The relevant fact briefly are that the petitioner, a private limited company registered under the Companies Act is engaged in the business of providing cleaning services and manpower supply services and is registered with the Service Tax Department on Service Tax Registration No.AAUCS6947BSD001 had been submitting its service tax returns and paying service tax right from date of its incorporation dated 25.03.2014. The case was selected for audit by the service tax department and the audit was conducted from 12.03.2019 and 13.03.2019. After conduct of audit a spot memo F.No.V(ST)474/SSOSPL/Gr.-18/JBP-II/2018-19/228 dated 17.05.2019 was issued by the authorities quantifying the differential tax payable at Rs.19,08,63,167/- apart from penalty and interest. The total demand was raised at Rs.32,25,18,555/-including penalty and interest.
3. It is urged that the Finance Act No.2 dated 01.07.2019 announced a Scheme viz Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 which provided mechanism for settling the dispute those are pending in appeals, arrears and voluntary disclosure. Different concessions were provided for different types of dispute resolution. The petitioner’s case was covered by Section 123(c) of Sabka Vishwas Scheme. The petitioner submitted Form SVLDRS-1 on 28.12.2019 requesting the settlement of tax demand of Rs.10,84,53,602/- (as computed by the petitioner) after rectifying arithmetical mistakes in the spot memo issued by authorities dated 17.05.2019. That during the pendency of SVLDRS-1, under misconception and ill advise the petitioner submitted a second application on Form SVLDRS-1 dated 14.01.2020 showing the total demand of Rs.19,08,94,967/-. The authorities in place of processing application in chronological order first processed the application dated 14.01.2020 and thereafter processed the petitioner’s application dated 28.12.2019 and rejected the same on the ground of duplicate filing whereas this application was original application the application which was accepted by the authorities, filed on 14.01.2020 was a duplicate application.
4. The grievance of the petitioner is that the Authority without providing an opportunity of hearing as contemplated under Section 127 of the Sabka Vishwas Scheme have rejected the petitioner’s application and have accepted the second application. It is thus manifest that in any case before issuance of SVLDRS-3 no notice on SVLDRS-2 was issued in spite of the fact that first application showing the lower figure was pending before the authorities. The rejection of first application dated 28.12.2019 treating it to be duplicate filing is grossly illegal. The rejection is without providing opportunity of hearing to the petitioner, in spite of application for correction was electronically uploaded by the petitioner on 29.08.2019 and submitted in physical form on 03.09.2019 for correction of apparent mistakes in adopting the gross value of service rendered by the petitioner. The petitioner accordingly seek reliefs quoted supra.
5. Respondents on their turn while denying the relief sought by the petitioner at the outset contend that there is no provision in the statute which requires following of chronological order while processing of SVLDRS application as would require a prior hearing for selecting which application has to be taken up for consideration.
6. As regard to considering the application dated 14.01.2020 it is contended that the evasion of service tax for the period from 2012-13 to June 2017 got unearthed during scrutiny of records which led to issuance of spot memo No.228 dated 17.05.2019 as to non-payment of Rs.49842 for the period 201213 and 2014-15, non-payment of service tax of Rs.190863167/-for the period 2015-16 to June, 2017, non payment of service tax of Rs.31800 on Legal And Consultancy Service and Rs.3500/- for late filing of returns which further led to issuance of show cause notice, demand notice on 30.08.2019 for Rs.196273073/- for service tax Rs.196273073/- which is pending finalization before the concerns of SVLDRS.
7. It is contended that the SVLDRS Scheme, 2019 has been launched as a one time measure for liquidation of pending disputes of Central Excise and Service Tax, liquidation of arrears, as well as to ensure to disclosure of unpaid taxes by a person eligible to make a declaration under the scheme; this scheme came into effect from 01.09.2019 till 15.01.2020. Dispute resolution and amnesty are the two components of the scheme. The dispute resolution component is aimed at liquidating the legacy cases locked up in litigation at various forums whereas the amnesty component gives an opportunity to those who have failed to correctly discharge their tax liability to pay the dues. It is further contended that all persons as specified in Section 125 of the Finance Act, 2019 (for short ‘Act 2019’) are required to file declaration in Form SVLDRS-1. Section 124 of the Act 2019 inter alia provides relief available under the Scheme was applicable for the cases where an enquiry or investigation or audit is pending against the declarant and the amount of duty payable under any of the indirect tax enactment as quantified on or before 30 June, 2019. It is further contended that Section 126 of the Act 2019 provides that the designated committee shall verify the correctness of the declaration as per the prescribed manner. That Central Board of Indirect Taxes and Customs (CBIC) has issued circulars No.1071/4/2019-CX.8 dated 27.08.2019, 1072/5/2019-CX dated 25.09.2019, 1073/6/2019-CX dated 29.10.2019 and 1074/7/2019-CX dated 12.12.2019. Further referring to Clause 9 of the Circular dated 27.08.2019, it is urged that the scope of discretion has to be kept to the minimum by linking the relief under the scheme to the duty amount which is known to both – Department and Tax payer in the form of show-cause-notice/order of determination or a written communication.
8. It is further stated that the petitioner filed two applications, on 28.12.2019 and 14.01.2020 to avail the benefit of SVLDRS Scheme which was processed on the basis of correctness of “Tax Dues” declared in the application with reference to the amount of duty quantified in the reference document mentioned in the said declaration. As there were application wherein the amount of ‘Tax Dues’ declared by the declarant in their SVLDRS application were not matching with the amount of duty quantified in the reference document issued on or before 30.06.2019, there was delay in proceessing. It is urged that the second application dated 14.01.2020 was processed early because the amount of Tax due declared therein matched with the amount of duty quantified in the departmental audit spot memo No.228 dated 17.05.2019. And being to be correctly filed, the amount of Rs.74423447.50 payable by the petitioner after allowing the benefit of SVLDRS was intimated vide SVLDRS–3 form issued on 10.02.2020. It is urged that with the acceptance of declared SVLDRS application dated 17.01.2020, the earlier application which required and was under process to match out the amount of Tax Due declared with the amount of duty quantified with reference document issued on or before 30.06.2019, therefore, rendered redundant.
9. We perceive logic in the action of the respondent in not taking decision on the application dated 28.12.2019, which the Department was not under statutory obligation to have considered first.
10. As we do not perceive any illegality or a jurisdictional error in considering the application dated 14.01.2020, rendering earlier application as redundant, no interference is caused.
11. Consequently, petition fails and dismissed. No costs.
