Merely for numbering appeal filed with CESTAT cannot be treated under arrears category to deny SVLDRS benefit 

R.Shanmugam Pillai & Sons Vs Designated Committee (Madras High Court)

No denial of SVLDRS benefit by treating assessee under arrears category on basis of numbering of appeal and pending adjudication before CESTAT

Conclusion: Even though assessee filed an appeal on 10 days prior to the cut off date before the CESTAT, therefore, on 30.06.2019, in the eye of law, there had been a litigation by way of appeal which had been filed and pending before the appellate forum, therefore, assessee was eligible to claim the benefit under the scheme by treating him under the category of “litigation”. It was unjustified to state that unless and until the appeal was numbered and it was pending adjudication before any appellate forum like the CESTAT, then only it could be considered to be an eligible person to be categorised under the litigation category,

Held: Assessee had a tax arrears payable to the respective authority. Therefore, in order to get the benefit of the scheme called ‘Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, assessee made an application and based on such application, the authority, who was the authority, under the scheme, to determine the amount payable by permitting assessee to avail the benefit under the scheme, had declared it as Rs.7,32,236/-, by proceedings dated 22.01.2020. However, subsequently by proceedings dated 27.01.2020, assessee having been considered to be under arrears category, the authority had determined the amount payable by assesssee as Rs.13,24,448/-. Felt aggrieved over the said declaration made by authority treating assessee as “under arrears” category, whereby the higher amount had been determined by authority, assessee had moved this writ petition.  It was held that admittedly, assessee filed an appeal on 20.06.2019 ie., 10 days prior to the cut off date before the CESTAT, therefore, on 30.06.2019, in the eye of law, there had been a litigation by way of appeal which had been filed and pending before the appellate forum. Whether the appeal filed on 20.06.2019 would be subsequently numbered or not was not the criteria, as the same had not been mentioned either under Section 124 or 125. Moreover, when there was a specific exclusion provided under Section 125, all other categories were eligible to seek such declaration in view of the language used in Section 125(1) ie., “all persons should be eligible to make a declaration under this scheme except the following, namely;” Therefore, what are all the excluded category exclusively given in Clauses (a) to (h), alone shall be excluded from the purview of the eligible persons to seek a declaration and all the remaining persons certainly, will be eligible to claim. Therefore, Section 125 shall not be read in isolation and it should be read with Section 124, which makes it clear that, the relief available to a declarant under the scheme shall be calculated, where, the tax dues are relatable to a show cause notice or one or more appeals arising out of such notice which is pending as on 30.06.2019. The said declaration categorising assessee under “arrears category” was not in consonance with Section 124 or 125. Therefore, assessee was eligible to claim the benefit under the scheme by treating him under the category of “litigation”. Therefore, what had been recorded in the order dated 22.01.2020 should prevail and the subsequent order dated 27.01.2020 could not be sustained.

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