Santosh S/o Domaji Bhandarkar Vs Union of India (Bombay High Court)
Santosh S/o Domaji Bhandarkar, a proprietor of a business providing manpower and security services, approached the Bombay High Court challenging the rejection of his application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme (SVLDRS) by the Designated Committee. The petitioner had admitted a service tax liability of Rs. 97,54,079 for the period between 2014-15 and 2017-18, which was not paid due to non-receipt of payments from clients. Despite this admission, the respondents rejected his application, arguing that the tax liability was not quantified by the investigation agency before June 30, 2019, as required under the scheme. The respondents contended that the petitioner had only estimated the liability without formal confirmation from the tax authorities.
The petitioner, on the other hand, relied on a circular dated August 27, 2019, which clarified that a written communication or admission of liability by the taxpayer could qualify as a valid declaration under the scheme. The petitioner argued that the communication dated June 19, 2019, where he admitted the liability, constituted a valid admission as per the clarification, thus making him eligible for the benefits under the scheme. After considering the arguments, the Bombay High Court found that the respondents had wrongly rejected the application, stating that the petitioner’s admission of liability should have been recognized as valid under the scheme. The Court quashed the impugned communication and show cause notice, remanding the matter to the Designated Committee for reconsideration, directing them to provide an opportunity for a hearing and pass a reasoned order within twelve weeks.
