Navin Housing and Properties (P) Ltd. Vs Designated Committee under Sabka Vishwas Legacy (Madras High Court)
In the present case, there is an overlap between the period covered under SCN1 and SCN2, the former covering the period December 2008 to January 2010 and the latter the period April 2008 to March 2010. The periods December 2008 to January 2010 are thus common under both SCNs. The revenue agrees in counter that the demand is duplicated. Hence, according to them, the demand under OinO2 stands reduced which 30%, as per the Scheme. Then they say that the amount duplicated needs to be reduced from the original demand and cannot be used as pre-deposit for the present demand as it has already been used towards pre-deposit for the appeal challenging OinO 1. This argument is unacceptable. R2 has, after examination of the two SCNs, Orders in Original and the demands raised thereunder held that the appeal is maintainable and this cannot be called into question again in counter. In fact, the counter, filed after the order passed by R2, runs contrary to the officers’ findings and conclusion.
High Court states that there being no dispute on the position that the petitioner has, admittedly, remitted the amount and the demand under SCN2/OinO2 is a duel demand, the computation of the petitioner is accepted and the impugned order set aside. The Dispute Resolution Scheme is an attempt to close legacy tax disputes and a certain amount of fairness should be seen in the interpretation of the provisions of the Scheme. Learned counsel for the respondent would harp on the argument that a dispute raised under one SCN cannot be settled by utilising a deposit made under a different SCN. This argument does not arise in a case such as the present, since the two SCNs relate to identical transactions, time periods and demands and constitute a duplication of proceedings.
Accordingly, this writ petition is allowed.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
The petitioner challenges an order passed by the Designated Committee under the Sabka Vishwas Legacy Disputes Resolution Scheme, 2019 (Scheme) dated 06.12.2019. The background to the matter is as follows:
i) The petitioner is engaged in the construction and sale of residential apartments and was registered as an assessee with the Service Tax Department.
ii) A Show Cause Notice (SCN) dated 12.10.2011 (SCN 1) was issued calling upon the petitioner to remit differential service tax for the periods December 2008 to January 2010 in regard to the services relating to two construction projects, namely, Marry Lands and Dayton Heights. Specifically, the differential tax computed for the period December 2008 to March 2009 (Period 1) was a sum of 19,15,491/-.
iii) A second notice dated 09.2.2012 (SCN 2) was thereafter issued calling upon the petitioner to remit differential service tax for the same period as covered in SCN 1, viz. December 2008 to March 2009 (vide Annexure to the SCN) and April 2009 to March 2010 (vide Annexure 1 to the SCN) and in respect of the same two projects. The differential under the Annexure was computed at a figure of Rs.19,18,375/- and the differential under Annexure 1 was computed at Rs.9,98,350/-, the total demand being Rs.29,16,716/-. No month-wise break-up of the demand is available as regards Annexure 1.
iv) As against the demand proposed in SCN 1 for an amount of Rs.1,69,52,423/-, the petitioner had remitted an amount of Rs.99,94,773/- and the aforesaid deposit/remittance was appropriated in Order –in-Original (OinO 1) dated 30.01.2013 as against the total demand.
v) Proceedings under SCN 2 were initiated by a personal hearing dated 28.02.2016, four (4) years after issue of the notice and the petitioner, vide reply 28.03.2016, while objecting to the delay in initiating proceedings, pointed out that the receipts in regard to the same two projects sought to be brought to tax had suffered tax already under OinO1 passed in 2013.
vi) As regards the demand covered under Annexure 1 (for the period April 2009 to March 2010), the petitioner submitted that though there was an omission to return receipts of turnover in the Service tax returns for the relevant period, the receipts had been duly included in the returns for the subsequent year, that is, 2010-2011 and hence there was no short payment as alleged.
vii) Submissions were also advanced on the legal issue as to whether tax would be leviable at all on receipts from construction activity and works contracts and reference made to Board Circulars in this respect. I refrain from adverting to these submissions in detail as they do not concern the issue in dispute before me.
viii) Suffice it to say that the assessing authority, notwithstanding the aforesaid submissions, proceeded to pass an Order-in-Original dated 14.10.2016 (OinO 2), reiterating the proposals under SCN 2 raising a demand for the same projects for two periods viz. Rs.19,18,373/- in OinO 2 as against Rs.19,15,471/- under OinO 1 for the period December 2008 to March 2009 (Period 1), and Rs.9,98,350/- for the period April 2009 to March 2010 (Period 2) as against a demand of 80,74,333/-under SCN 1 and OinO 1 which also covered period 2, albeit till January 2009. The additional period covered under SCN 2 were the months of February and March 2010 alone.
ix) As against OinO 1, the petitioner appears to have filed a first appeal before the Commissioner of Service tax (Appeals) and availed the benefit of the deposit of Rs.99,94,773/- towards statutory pre-deposit for that appeal. During the pendency of the appeal the Government announced the Sabka Vishwas (Legacy Dispute Resolution) Scheme to settle disputes in various legacy laws including service tax law. The petitioner availed of the same.
x) The Scheme called for the remittance of 30% of the disputed demand to be remitted, and in computing this amount, the assessee was entitled to seek adjustment of the amount remitted as pre- deposit. This relief is in terms of Section 124 (1) and (2) of the Scheme, sub-section (1) setting out the mode of computation of the relief and (2) stipulating that the amount payable by an assessee shall take into account the amount of deposit made during enquiry/audit/investigation or pre-deposit made prior to institution of any statutory appeal.
xi) The petitioner filed an appeal before the Commissioner of Service Tax (Appeals) challenging OinO 2 as well. Since, according to the petitioner, the demand raised in OinO 2 dated 14.10.2016 was a duplication of the demand already raised under OinO 1, it did not effect the statutory pre-deposit, as a result of which, the appeal was returned as not maintainable.
xii) The return of the appeal was challenged by the petitioner in W.P.No.3167 of 2017 and vide order dated 09.02.2017, this Court directed the Appellate Commissioner to consider the claim of the petitioner regarding duplication of demands set out under a representation dated 16.12.2016 and pass orders within a period of two (2) weeks from date of receipt of the Courts’ order. This order was not complied with by the revenue.
xiii) Since the Legacy Scheme was announced during the pendency of the aforesaid appeal, the petitioner availed of the Scheme in respect of appeal challenging OinO 2 dated 14.10.2016 as well.
xiv) The aforesaid narration was captured by the petitioner in the personal hearing prior to consideration of its declaration under the Scheme. However, the declaration came to be rejected directing the petitioner to pay 30% of the disputed demand as computed under the Scheme, amounting to Rs.8,75,014/- vide order dated 06.12.2019.
xv) The present Writ Petition is filed challenging the aforesaid order dated 12.2019.
2. When the matter came up for admission, this Court, vide order dated 09.01.2020 impleaded the Commissioner of Service Tax (Appeals-II) suo motu as R2 and reiterated the direction to him to consider and dispose the representation of the petitioner dated 16.12.2016 as already ordered by this Court on 09.02.2017 in W.P.No.3167 of 2017. The specific direction of the Court had been that the representation be disposed within a period of two (2) weeks from date of receipt of its order and this had not been complied with by the appellate authority.
3. The petitioner had, in the representation aforesaid, specifically averred that a dual demand of service tax had been raised for the period December 2008 to January 2010 under two separate SCNs. The order passed by me on 09.01.2020 is extracted below:
Mr. Ramasamy, learned Junior Panel Counsel accepts notice for R1 and seeks four (4) weeks’ time to obtain instructions and file a counter.
2. The impugned communication is prima facie pre-mature insofar as the determination of the amount in dispute, based on which, 30% be deposited by the petitioner under the Sabka Vishwas Scheme (in short ‘Scheme’) is yet pending resolution before the Commissioner of Service Tax (Appeals-II) (CST(Appeals)).
3. This Court, vide order dated 09.02.2017 in W.P.No.3167 of 2017 has set aside communication dated 21.12.2016 directing the CST (Appeals) to go into the representation of the petitioner dated 16.12.2016 wherein the petitioner has specifically averred that a duel demand of service tax has been raised in respect of the period December, 2008 to March 2009 under two separate show cause notices concurrently. In fact, it is seen that the petitioner has brought this Courts’ order to the notice of the Commissioner under communication dated 27.02.2017, despite which the representation is yet pending.
4. The rejection of the petitioners’ declaration under the Scheme even prior to adjudication on this point, is prima facie incorrect.
5. In the light of the aforesaid, the Commissioner of Service Tax (Appeals-II), Newry Towers, 2054, I Block, 2 nd Avenue, 12 th Main Road, Anna Nagar West, Chennai – 600 040 is impleaded suo motu as R2 in this Writ Petition.
6. Ramasamy, learned Junior Panel Counsel accepts notice for R2 and seeks four (4) weeks’ time to obtain instructions and file a counter.
7. A direction is issued to R2 to consider and dispose the representation of the petitioner dated 16.12.2016 after hearing the petitioner, who will appear before him on Tuesday, the 21 st of January, 2020 at 10.30 a.m. without expecting any further notice in this regard.
8. Let necessary orders be passed on the representation within a period of four(4) weeks, i..e, on or before 11.02.2020. List on 12.02.2020 for production of order. Impugned Form SVLDRS -III dated 06.12.2019 is stayed till then
4. In compliance of the direction issued above, R2 disposed the representation of the petitioner vide order dated 27.01.2020. The issue framed for consideration was whether there was a duplication of demand in the two SCNs dated 12.10.2011 and 09.02.2012. In paragraphs 8 to 11, under the caption ‘Discussion and Findings’, R2 states as follows:
Discussion and Findings
8. ……. On verification of the two Notices, I find that SCN No.443/2011, based on an internal audit objection, sought to demand an amount of Rs.1,69,07,927/- for the period from December 2008 to January 2010 involving two construction projects of the appellant viz., Marry Lands and Dayton Heights. It is also clear from the Notice that an amount of Rs.99,94,773/- has already been paid by the assessee against this demand which was subsequently appropriated vide the Order-in-Original No.5/2013 dated 30.1.2013. The other Show Cause Notice SCN No.20/2012 dated 9.2.2012, which resulted in issue of Order-in-Original No.48/16-17-ST-II dated 14.10.16, was issued seeking to demand an amount of Rs.29,16, 716/- covering the periods 2008-09 and 2009-10 on account of CERA objection, involving the very same construction projects viz., Marry Lands and Dayton Heights.
9. Preliminary verification reveals that the two demands involved the same periods and on the same construction projects. To decide whether the demand has been made on the very same values, i.e. if the demands were duplicated, it is required to verify the Annexures to the two Show Cause Notices wherein the demand was quantified.
The Annexure to the SCN No.443/2011 dated 12.10.2011 is are reproduced below.
ANNEXURE TI SCN 443/2011
(A) M/s. NAVIN HOUSING & PROPERTIES PVT. LIMITED
