RG Studios Vs Union of India & Ors. (Bombay High Court)
Summary: The Bombay High Court allowed the writ petition filed by RG Studios challenging rejection of its declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The Department had initiated service tax investigation against the petitioner and, on 5 March 2019, directed Kotak Mahindra Bank to create a lien under Section 87(b) of the Finance Act, 1994 on the petitioner’s account while expressly quantifying the outstanding service tax liability at Rs.44,28,311/-. A similar communication was issued to a debtor of the petitioner.
The petitioner subsequently filed its SVLDRS declaration on 30 December 2019 declaring the same amount as tax dues, but the declaration was rejected on the ground that the liability had not been quantified during investigation. After an earlier remand by the High Court, the Designated Committee again rejected the declaration. Examining Section 121(r) of the Finance Act, 2019 and CBIC Circular No.1071/4/2019-CX.8 dated 27 August 2019, the High Court held that “quantified” means a written communication of the amount of duty payable and that the notice dated 5 March 2019 clearly quantified the petitioner’s outstanding service tax liability before the statutory cut-off date of 30 June 2019.
