Case Law Details
Your Fitness Club Pvt. Ltd. Vs Union of India & Ors. (Bombay High Court)
Bombay High court Allows SVLDR Scheme Benefit by striking down SVLDRS-3 as the same not served to petitioner due to technical glitch of SVLDRS portal because of which petitioner was locked out of the portal and after login-in credentials where not found
Summary of Judgment
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 – Designated Committee issued SVLDRS-2, determining amount of duty which was payable by petitioner and called upon petitioner to confirm or appear for personal hearing before committee if he did not agree with amount estimated – Petitioner through SVLDRS-2A accepted estimated amount payable that was communicated in Form SVLDRS-2 – However, SVLDRS-3 was not received by petitioner despite of it being issued in March, 2020 – Further, petitioner had logged out/was unable to access departmental portal; even no email/sms/intimation was received by him – In this circumstances, Form SVLDRS-3, dated 13-3-2020 was to be set aside and petitioner was to be permitted to respond to Form SVLDRS-2 and file Form SVLDRS-2A afresh – If it was technically not feasible to file in portal, petitioner was to be allowed to file physical copy of Form SVLDRS-2A. [paras 3 to 6, 9]
Background
Petitioner is a Company register under Companies act, and is an engaged in providing ‘Health Club and fitness Center Services’, under Chapter V of the Finance Act 1994.
Investigation
1. Intelligence was gathered by Service Tax-II, Commissionerate, Mumbai that petitioner had failed to filed ST-3 returns regularly and had also failed to declare the correct taxable value of their services.
2. On the Basis of the Intelligence and in furtherance of Investigation against the Petitioner by the Service Tax-II, Commissionerate, Mumbai, a Show Cause cum Demand Notice (SCN) was issued by Commissioner CGST & CX, Mumbai East Commissionerate to the Petitioner on 13th December 2016 bearing No. CONNR/ST-II/AE/59/2016-2017 demanding a duty of Rs. 5,07,22,977/-.
SVLDRS Application
1. on the basis of SCN petitioner filed SVLDRS-1 Wherein Tax dues was declared as Rs.5,07,22,977/-, Pre-deposit amount as 2,53,61,488.50/- and tax due to less relief as Rs. 0.00/-.
2. Soon after filing the SVLDRS-1 petitioner received an Acknowledgement Receipt of the same and subsequent verification was done by respondent.
3. As petitioner had not received any SMS or Email as to further proceeding of SVLDRS process. The petitioner tried to find out about same on the SVLDRS portal , wherein it was noticed that the portal was locked with remark “your account has been locked”.
4. then petitioner tried the option of forget password, wherein a new remark appeared that being “No Taxpayer found for above Credentials”. However, despite entering the registered mobile No. and email which appears on the SVLDRS-1
5. After number of attempts petitioner raised this issue before the CBIC-Mitra-Helpdesk which was acknowledge by them
6. In the mean time petitioner received a mail form respondent for payment of SVLDR-3 dues but no details of SVLDRS-3 was shared with the petitioner.
7. After various attempts petitioner gets access of the portal after wherein svldrs-2 ,2A and 3 were issued long back.
8. petitioner makes application for payment.
Rejection of Application
1. The authorities rejected the petitioner’s application under the SVLDRS, stating that the last date of payment has passed away as SVLDRS-3 payment should be done after 30 days of login
Petitioner’s Stand:
Advocate Mr. Shreyas Shrivastava along with Mr. Saurabh Mashelkar for Petitioner
matter drafted by advocate Saurabh mashelkar
1. Petitioner was logged out of the system no communication made to petitioner regarding SVLDRS-3, that not even any email / sms /intimation was not received by petitioner
2. Petitioner made various attempts to login like CBIC-Mitra-Helpdesk , personal visits and mails.
3. Respondent only communicated svldrs-3 issued but no details provided.
4. Impugned rejection is bad in law and respondent has acted ultra-virus to the established tests of Finance (no.2) Act, 2019, Scheme, rules framed thereunder and user manual issued and circulated by the Union of india.
5. serious Breach of natural justice not providing personal hearing and order copy.
Respondent’s Stand:
1. petitioner has accepted the estimate amount payable communicated in Form No. SVLDRS-2 and referred to in Form No. SVLDRS-2A filed by petitioner in the petition where petitioner states ‘Yes’ to the estimate.
2. Petitioner did not follow proper process in case of account been locked out.
Court’s Analysis:
1. Its true that petitioner was logged out of the system and there was no communication of SVLDRS forms to petitions as petitioner has shown various screen shots and messages and respondent also has not denied the same in affidavit -in- reply.
2. In this circumstances, Form SVLDRS-3, dated 13-3-2020 was to be set aside and petitioner was to be permitted to respond to Form SVLDRS-2 and file Form SVLDRS-2A afresh.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
1. Petitioner is impugning Form No. SVLDRS-3 that was issued to petitioner under Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 (SVLDRS) formulated under section 127 of the Finance ( No. 2) Act, 2019.
2. Petitioner had filed a declaration dated 28.12.2019 under SVLDRS. This was in view of a show-cause-notice dated 13.12.2006 that petitioner had received demanding a duty of Rs. 5,07,22,977/-. During pendency of the show-cause-notice, petitioner had made pre-deposit of Rs. 2,53,61488.50. As per the declaration, the tax dues less tax reliefs, payable by the petitioner was stated to be ‘NIL’ by petitioner.
3. It is petitioner’s case that thereafter petitioner did not hear anything from auto generated system. Petitioner made various efforts to find out and petitioner did not get a very positive response. Annexed to the petition is also a copy of Form No. SVLDRS-2 dated 14.02.2020 and response to Form No. SVLDRS-2 being Form No. SVLDRS-2A dated 25.02.2020. In Form No. SVLDRS-2, the designated committee has determined an amount of Rs. 69,70,457.00 as payable by petitioner and called upon petitioner to confirm and if petitioner did not agree with the amount estimated, then petitioner can appear for a personal hearing before the committee.
4. Mr. Ochani submitted that petitioner has accepted the estimate amount payable communicated in Form No. SVLDRS-2 and referred to in Form No. SVLDRS-2A filed by petitioner in the petition where petitioner states ‘Yes’ to the estimate.
5. Shrivastava states that though From No. SVLDRS-3 is dated 13.03.2020, petitioner never received Form No. SVLDRS-3 but only received an email without indicating any amount.
6. Petitioner has averred in the petition that petitioner was logged out / was unable to access the portal and that even any email / sms / intimation was not received by petitioner.
7. We have considered the affidavit-in-reply filed by one Mr. Milind Gawai, the Principal Commissioner of CTST & Central Excise, Mumbai affirmed on 28.06.2021. In the affidavit-in-reply, respondents do not deny petitioner’s allegation that petitioner never received any email / sms / intimation or petitioner was logged out. According to the affiant, designated committee has no role to play in issuance of email / sms since it is system generated in an automated manner with minimal human intervention. The affiant has also suggested what petitioner could have done and that the designated committee has not taken any steps to block any account. What is important to note is the fact that petitioner had a serious problem in accessing the portal has not been denied. Petitioner has also annexed screen shots of the portal when petitioner made attempts to find out status of the declaration.
8. In fact, petitioner has strangely even received a message that no taxpayer was found in the credentials or the PAN number mentioned therein. We find that there was serious problem in the portal otherwise if such taxpayer was not found, petitioner should not have even received a show-cause-notice in the first place.
9. In the circumstances, without going into the merits of the matter in our view, interest of justice requires that we make limited interference. We set aside Form No. SVLDRS-3 dated 13.03.2020 that has been issued. Petitioner is permitted to respond to Form No. SVLDRS-2 that it has received and file Form No. SVLDRS-2A afresh. If it is technically not feasible to file in the portal, respondent No. 5 will inform petitioner about that within two weeks of this order getting uploaded. In such case, within one week of receiving such communication, petitioner shall file physical copy of form No. SVLDRS-2A or objections with respondent No. 5 who shall consider petitioner’s submissions and pass such order as deemed fit in accordance with law. Before passing any such order, respondent No. 5 shall give a personal hearing to petitioner and notice of personal hearing shall be issued at least seven working days in advance. If respondent No. 5 is going to rely on any orders or judgments or pronouncements of any forum, a list thereof shall also be provided to petitioner along with the notice for personal hearing so that petitioner will be able to deal with / distinguish those pronouncements.
10. Petition disposed.
Author Bio
