HC Remand Back Matter to Designated Committee to take Decision Regarding Refund under SVLDRS

Case Law Details

Case Name : Prathamesh Dream Properties P. Ltd Vs Commissioner of CGST & Central Excise & others (Bombay High Court)

Appeal Number : WP-LD-VC-234 of 2020

Date of Judgement/Order : 05/11/2020

Related Assessment Year :

Courts : All High Courts Bombay High Court

Download Judgment/Order

Prathamesh Dream Properties P. Ltd Vs Commissioner of CGST & Central Excise & others (Bombay High Court)

The issue under consideration is whether petitioner should have the benefit of relief as a declarant under the ‘pending litigation category’ and thus entitled to refund of the amount paid?

High Court states that a careful and conjoint reading of section 123(a) and section 124(1)(a) would indicate that the requirement of the statute is pendency of the appeal filed by the declarant as on 30.06.2019. Admittedly, petitioner’s appeal was pending before the CESTAT as on 30.06.2019, may be in defective form. The statute does not say that for being entitled to the relief under the ‘pending litigation category’, the appeal must be pending as on 30.06.2019 on being admitted by the appellate forum. This is not the requirement of the law. To hold so would be doing violence to the plain language of the statute. When something is not required or provided by the statute, it would be wholly untenable to add or read such a requirement into the statute to the disadvantage of the applicant (declarant). All that is provided for and is required, is that an appeal must be filed and that appeal should be pending as on 30.06.2019. It is immaterial whether the appeal has been provided a regular number or given a diary number. In such circumstances, HC have no hesitation to hold that the appeal filed by the petitioner before the CESTAT against the order-inoriginal dated 18.09.2018 was pending as on 30.06.2019 and therefore, the application (declaration) of the petitioner should be treated as one under the ‘pending litigation category’ and not one under the ‘arrears category’. This is because in addition to the above discussion, to be eligible under the ‘arrears category’ in terms of section 121(c), no appeal should be filed by the declarant against the order-in-original before expiry of the limitation period for filing appeal or the order-in-appeal has attained finality or the declarant has admitted the tax liability but has not paid the same which is not the position in the present case as petitioner had filed appeal against the order-in-original before expiry of the limitation period. Having regard to the discussions made above and what HC have held in Capgemini Technology Services India Limited (supra) and Thought Blurb (supra), declaration of the petitioner filed under the scheme on 23.12.2019 has to be construed to be one under the ‘pending litigation category’. Accordingly, the matter is remanded back to the Designated Committee to take a fresh decision as to the consequential relief to be granted to the petitioner, including refund of the amount paid by the petitioner, treating the declaration of the petitioner as one under the ‘pending litigation category’ after affording reasonable opportunity of hearing to the petitioner.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

Heard Mr. Shrikant Kamat, learned counsel for the petitioner and Mr. Pradeep S. Jetly, learned senior counsel for the respondents.

2. By filing this petition under Article 226 of the Constitution of India, petitioner seeks a direction to the respondents, more particularly to respondent Nos.1 and 2, to withdraw the form SVLDRS-3 (exhibit-K) and for a further direction to the respondents to refund the amount of Rs.47.91 lakhs collected from the petitioner.

3. Case of the petitioner is that it is a company which is engaged in the business of construction of warehouses and letting them out on rent to wholesalers and retailers. Most of the projects of the petitioner are concentrated in and around Bhiwandi area which is within Thane district in the State of Maharashtra.

3.1. In connection with service tax dues, petitioner was served with a show cause-cum-demand notice dated 08.04.2014 issued by the Commissioner of Service Tax, Mumbai-II raising certain demands for the period from 2008-09 to 2012-13. As per the show cause-cumdemand notice, an amount of Rs.3,60,03,185.00 was stated to be due and recoverable from the petitioner.

3.2. It is stated that during investigation by the service tax authorities and prior to the issuance of show cause-cum-demand notice, petitioner had paid service tax dues to the tune of Rs.2,80,74,255.00 by various challans, the details of which have been furnished in paragraph 3 of the writ petition.

3.3. It is further stated that prior to issuance of the show cause-cumdemand notice, service tax authorities had ordered freezing of petitioner’s debtor’s account of M/s. Future Retail Limited which was occupying and using warehouse space of the petitioner on lease. The debtor was instructed by the service tax authorities to remit the rental dues to be paid to the petitioner to the account of the service tax commissionerate account. In this way, service tax authorities appropriated the rent remitted by M/s. Future Retail Limited towards service tax dues recoverable from the petitioner. According to the petitioner, total amount of Rs.17,94,402.00 remitted by M/s. Future Retail Limited towards lease rent during the period when the said debtor account was frozen by the service tax authorities, was appropriated by the service tax authorities. Such freezing of account was however lifted with effect from 30.06.2014. Petitioner has annexed two challans both dated 07.05.2014 evidencing appropriation of Rs.17,94,402.00 by the service tax authorities.

3.4. Thus according to the petitioner, it had paid Rs.2,80,74,255.00 on account of service tax dues prior to issuance of the show cause notice and a further amount of Rs.17,94,402.00 was appropriated by the service tax authorities from the debtor’s account, prior to and immediately preceding the show cause-cum-demand notice.

3.5. Commissioner of GST and Central Excise, Navi Mumbai passed the order-in-original on 18.09.2018 confirming service tax demand of Rs.3,60,03,185.00 with interest and penalty.

3.6. Aggrieved by the aforesaid order-in-original, petitioner preferred an appeal before the Customs, Excise and Service Tax Appellate Tribunal, Mumbai Regional Bench, Mumbai (CESTAT) on 17.12.2018 in respect of which Diary No.901472018 was given. According to the petitioner it had deposited the requisite statutory fee of Rs.10,000.00 along with the appeal vide two separate demand drafts of Rs.5,000.00 each, one of which appeared to have been misplaced by the registry of CESTAT. Therefore, the appeal was kept aside as defective. It is stated that intimation of the registry of CESTAT for rectification of defect was never received by the petitioner. Subsequently, petitioner came to know that CESTAT had dismissed the appeal of the petitioner on 09.12.2019.

3.7. In the meanwhile, Central Government introduced an amnesty scheme called ‘Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019’ as part of Finance (No.2) Act, 2019.

3.8. According to the petitioner it was eligible to submit application (declaration) under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (briefly ‘the scheme’ hereinafter) under section 124(1)(a) of Finance (No.2) Act, 2019 (briefly ‘the Act’ hereinafter) since it was a case of pendency of appeal as on 30.06.2019. Accordingly, petitioner submitted application (declaration) under the said scheme on 23.12.2019 under ‘pending litigation category’. However, the Designated Committee issued notice in form SVLDRS-2 to the petitioner on 23.01.2020 treating the petitioner as a declarant under ‘arrears category’ and not under ‘pending litigation category’. Vide the said notice, the Designated Committee proposed the amount in arrears at Rs.79,85,457.00 and on that basis relief to the petitioner was determined at Rs.31,94,182.80. Thus, an amount of Rs.47,91,274.20 (Rs.79,85,457.00 – Rs.31,94,182.80) was quantified by the Designated Committee as the dues payable by the petitioner. While determining the amount in arrears, Designated Committee accepted Rs.2,80,17,728.00 as the pre-deposit made by the petitioner and not Rs.2,98,68,657.00.

3.9. Since the petitioner was not in agreement with the aforesaid classification of the petitioner as a declarant under ‘arrears category’ and the resultant dues determined, it filed objection before the Designated Committee in the prescribed form i.e., SVLDRS-2A on 28.01.2020. In this connection, a personal hearing was granted to the petitioner by the Designated Committee, comprising of the first and the second respondents, on 31.01.2020. In the course of the personal hearing, petitioner submitted before the Designated Committee that its appeal before the CESTAT filed on 17.12.2018 was pending as on 30.06.2019; therefore, petitioner qualified as a declarant under the ‘pending litigation category’. Petitioner had paid total cumulative amount of Rs.2,98,68,657.00 (Rs.2,80,74,255.00 + Rs. 17,94,402.00). Thus, petitioner had paid much more than 50% of the tax demanded in the show cause notice. In such a case petitioner was not required to make any further payment of dues if the petitioner is construed to be a declarant under the ‘pending litigation category’. Therefore, the amount of Rs.47,91,274.20 as determined by the Designated Committee was not required to be paid by the petitioner.

3.10. However, in spite of such submissions by the petitioner, Designated Committee issued the requisite form SVLDRS-3 re-stating the earlier position and directing the petitioner to pay Rs.47,91,274.20. The said form was issued to the petitioner on 06.02.2020.

3.11. Since the scheme did not provide for any scope to a declarant to question such determination without paying the dues as determined, petitioner had no other alternative but to deposit the said amount of Rs.47,91,274.20 on 05.03.2020. Thereafter the Designated Committee issued the discharge certificate in Form No.SVLDRS-4 on 06.03.2020 for full and final settlement of the tax dues under section 127 of the Act.

4. Aggrieved by the aforesaid, present writ petition has been filed by the petitioner seeking the reliefs as indicated above.

5. Respondent Nos.1, 2 and 3 have filed a common affidavit. Stand taken in the affidavit is that claim of the petitioner that its appeal was pending before CESTAT on 30.06.2019 is not correct. CESTAT had found certain defects in the appeal of the petitioner before admission of the appeal and had issued notices on 02.01.2019, 25.03.2019 and 26.07.2019 to the petitioner for rectification of the defects but the letters were returned unserved by the postal department with the remark ‘left’. Since the defects were not rectified by the petitioner, CESTAT passed order on 09.12.2019 holding that the appeal was not maintainable and was accordingly not entertained. Thus, it is contended that the appeal of the petitioner was not entertained by CESTAT; in other words, it was not admitted. Since the appeal was not admitted, claim of the petitioner that appeal filed by it was pending as on 30.06.2019 would not be correct.

5.1. SVLDRS-1 application format i.e., the declaration has a column for appeal number in case application is filed under ‘pending litigation category’. Petitioner did not provide appeal number but provided diary number in that column. CESTAT had passed an order on 09.12.2019 not entertaining the appeal. Petitioner had filed application (declaration) under the scheme on 23.12.2019. When the petitioner had filed the application (declaration), it was fully aware of the order passed by the CESTAT on 09.12.2019 but still it filed the application under the ‘pending litigation category’. The correct category of the petitioner would be ‘arrears category’ and this was informed by the Designated Committee to the authorized representative of the petitioner in the course of personal hearing on 31.01.2020. Respondents have referred to section 124(1) of the Act and submitted that under the scheme where the amount involved was more than Rs.50 lakhs, in a case under the ‘arrears category’, relief to the declarant would be 40%. Amount due was determined as per the scheme and not arbitrarily.

5.2. Regarding claim of the petitioner that it had made pre-deposit of Rs.2,98,68,657.00 and not Rs.2,80,17,728.00 as determined by the Designated Committee, petitioner did not submit any evidence of such payment during the personal hearing. Therefore, Designated Committee had no option but to consider the amount of Rs.2,80,17,728.00 as pre-deposit.

5.3. In the circumstances, respondents submit that there is no merit in the writ petition which should accordingly be dismissed.

6. Submissions made by learned counsel for the parties are on pleaded lines. Therefore, a detailed reference to the same is considered not necessary. However, the submissions so made have received the due consideration of the Court.

7. Short point for consideration is whether petitioner’s application (declaration) under the scheme should be construed as one under the ‘pending litigation category’ or under the ‘arrears category’? Ancillary to the above question would be the question as to whether petitioner should have the benefit of relief as a declarant under the ‘pending litigation category’ and thus entitled to refund of the amount paid?

8. To answer the above questions, it would be apposite to briefly highlight only those portions of the scheme which are relevant and necessary for adjudication of the present lis.

9. Sections 120 to 135 form part of Chapter V of the Act which deals with the scheme. Section 125 deals with eligibility to file application (declaration) under the scheme. It contains a negative list. Anyone who does not fall within the negative list would be eligible to file application or make a declaration under the scheme. Section 125(1)(a) says that a person who had filed an appeal before the appellate forum and such appeal had been heard finally on or before 30.06.2019 would not be eligible to make a declaration under the scheme.

9.1. Section 124 deals with reliefs available to a declarant under the scheme. Sub-section (1) deals with five situations where reliefs are available to an applicant (declarant) in the proportion mentioned thereunder. As per clause (a), where the tax dues are relatable to a show cause notice or one or more appeals arising out of such notice is pending as on 30.06.2019 and if the amount of duty is Rs.50 lakhs or less, then 70% of the tax dues and if the amount of duty is more than Rs.50 lakhs, then 50% of the tax dues.

9.2. As per clause (c), where the tax dues are relatable to an amount in arrears and if the amount of duty is Rs.50 lakhs or less, then 60% of the tax dues and if the amount of duty is more than Rs.50 lakhs, then 40% of the tax dues.

9.3. Sub-section (2) of section 124 clarifies that the relief calculated under sub-section (1) shall be subject to adjustment of any pre-deposit made.

10. ‘Tax dues’ has been explained in section 123. As per clause (a)(i) where a single appeal arising out of an order is pending as on 30.06.2019 before the appellate forum, tax dues would mean the total amount of duty which is being disputed in the said appeal. As per clause (e), where an amount in arrears relating to the declarant is due, tax dues would mean the amount in arrears.

11. The expression ‘amount in arrears’ is defined under section 121(c)
in the following terms:-

“(c) ‘amount in arrears’ means the amount of duty which is recoverable as arrears of duty under the indirect tax enactment, on account of‑

(i) no appeal having been filed by the declarant against an order or an order in appeal before expiry of the period of time for filing appeal; or

(ii) an order in appeal relating to the declarant attaining finality; or

(iii) the declarant having filed a return under the indirect tax enactment on or before the 30th day of June, 2019, wherein he had admitted a tax liability but not paid it;”

11.1. In other words, ‘amount in arrears’ would mean the amount of duty which is recoverable as arrears of duty under the concerned indirect tax enactment (in this case, service tax) on account of no appeal having been filed by the declarant against the order-in-original or against the order-in-appeal before the expiry of the timeline for filing appeal or further appeal; or the order-in-appeal relating to the declarant had attained finality; or in a case where the declarant had filed return on or before 30.06.2019 admitting the tax liability but had not paid the same.

12. According to the petitioner, if its application (declaration) is treated to be one under the ‘pending litigation category’, it would not be required to make any further payment even though respondents accepted Rs.2,80,17,728.00 as the pre-deposit made by the petitioner instead of Rs.2,98,68,657.00 claimed by the petitioner, omitting from consideration the amount of Rs.17,94,402.00 appropriated by the service tax authorities from the account of the petitioner’s debtor i.e., M/s. Future Retail Limited.

13. In a proceeding under Article 226 of the Constitution of India, Court would ordinarily refrain from entering into determination of facts and figures; for example, in this case, as to what would be the exact quantum of relief available to an applicant (declarant) under the ‘pending litigation category’ and under the ‘arrears category’. However, Court would proceed on the projection of the petitioner that if its application (declaration) is treated as one under the ‘pending litigation category’, it would be more beneficial to the petitioner as not only no further amount would be required to be paid by the petitioner; rather it would be entitled to refund of the amount paid by it because this aspect is not disputed by the answering respondents in their affidavit.

13.1. Therefore, the dispute boils down to the moot question as to whether application (declaration) of the petitioner should be construed to be one under the ‘pending litigation category’ or under the ‘arrears category’?

14. From the relevant provisions of the scheme as alluded to hereinabove we find that under section 125(1)(a) a person, who had filed an appeal before the appellate forum and such appeal had been heard finally on or before 30.06.2019, would not be eligible to make a declaration under the scheme. Section 124(1)(a) provides that the relief available to a declarant under the scheme in a case where the tax dues are relatable to the show cause notice or one or more appeals arising out of such notice which is pending as on 30.06.2019 and if the amount of duty is Rs.50 lakhs or less, then 70% of the tax dues and if the amount of duty is more than Rs.50 lakhs, then 50% of the tax dues. Provisions of sub-section (1) of section 124 have been made subject to the conditions specified in sub-section (2) which says that any amount paid as pre-deposit at any stage of appellate proceedings under the indirect tax enactment shall be deducted when issuing the statement indicating the amount payable by the declarant.

15. There is no dispute to the fact that against the order-in-original dated 18.09.2018, petitioner preferred appeal before the CESTAT on 17.12.2018. It is also not in dispute that for whatever reason the appeal was marked as defective for which no regular number was provided but diary number was given being Diary No.901472018. Despite reminders by the CESTAT since the defect was not rectified, order was passed by the CESTAT on 09.12.2019 holding that the appeal filed by the petitioner was not maintainable and accordingly was not entertained.

16. Stand taken by the respondents is that since the appeal was not admitted and was ultimately not entertained on 09.12.2019, which was to the knowledge of the petitioner when it had filed the application (declaration) under the scheme on 23.12.2019, it could not be construed that the appeal of the petitioner was pending as on 30.06.2019; rather in such a scenario it would be a case under the ‘arrears category’.

17. We have already noticed the language of sections 123(a), 124(1) (a) and 125(1)(a). That the petitioner was eligible to make a declaration is acknowledged by the respondents though they contend it was rightfully classified under the ‘arrears category’ and not under the ‘pending litigation category’. When the respondents have acknowledged that petitioner was eligible to make the declaration, it would mean that it was not ineligible under section 125(1)(a). In other words, it would mean that respondents have accepted the position that petitioner had filed an appeal before the appellate forum but that appeal was not finally heard on or before 30.06.2019. It would rather mean that appeal of the petitioner was pending as on 30.06.2019.

17.1. Proceeding further, a careful and conjoint reading of section 123(a) and section 124(1)(a) would indicate that the requirement of the statute is pendency of the appeal filed by the declarant as on 30.06.2019. Admittedly, petitioner’s appeal was pending before the CESTAT as on 30.06.2019, may be in defective form. The statute does not say that for being entitled to the relief under the ‘pending litigation category’, the appeal must be pending as on 30.06.2019 on being admitted by the appellate forum. This is not the requirement of the law. To hold so would be doing violence to the plain language of the statute. When something is not required or provided by the statute, it would be wholly untenable to add or read such a requirement into the statute to the disadvantage of the applicant (declarant). All that is provided for and is required, is that an appeal must be filed and that appeal should be pending as on 30.06.2019. It is immaterial whether the appeal has been provided a regular number or given a diary number.

18. In such circumstances, we have no hesitation to hold that the appeal filed by the petitioner before the CESTAT against the order-inoriginal dated 18.09.2018 was pending as on 30.06.2019 and therefore, the application (declaration) of the petitioner should be treated as one under the ‘pending litigation category’ and not one under the ‘arrears category’. This is because in addition to the above discussion, to be eligible under the ‘arrears category’ in terms of section 121(c), no appeal should be filed by the declarant against the order-in-original before expiry of the limitation period for filing appeal or the order-in-appeal has attained finality or the declarant has admitted the tax liability but has not paid the same which is not the position in the present case as petitioner had filed appeal against the order-in-original before expiry of the limitation period.

19. The scheme was elaborately examined by this Court firstly in Capgemini Technology Services India Limited Vs. Union of India, MANU/MH/1428/2020 and thereafter in Thought Blurb Vs. Union of India, decided on 27.10.2020. In Thought Blurb (supra), this Court referred to the speech of the Hon’ble Finance Minister, Government of India while introducing the scheme, statement of objects and reasons as well as circular dated 27.08.2019 of the Central Board of Indirect Taxes and Customs and held as under:-

“24. Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (already referred to as “the scheme” herein-before) was introduced by the Finance (No.2) Act, 2019 and notified in the Gazette of India, Extraordinary on 1st August, 2019.

While proposing the scheme as part of her budget speech for the year 2019-20, Hon’ble Finance Minister, Government of India stated thus :-

“GST has just completed two years. An area that concerns me is that we have huge pending litigations from pre-GST regime. More than Rs.3.75 lakh crore is blocked in litigations in service tax and excise. There is a need to unload this baggage and allow the business to move on. I, therefore, propose, a Legacy Dispute Resolution scheme that will allow quick closure of these litigations. I would urge the trade and business to avail this opportunity and be free from legacy litigations.”

25. Statement of object and reasons with respect to the scheme reads as under :-

“The scheme is a one time measure for liquidation of past disputes of central excise and service tax as well as to ensure disclosure of unpaid taxes by a person eligible to make a declaration. The scheme shall be enforced by the Central Government from a date to be notified. It provides that eligible persons shall declare the tax due and pay the same in accordance with the provisions of the scheme. It further provides for certain immunities including penalty, interest or any other proceedings under the Central Excise Act, 1944 or Chapter V of the Finance Act, 1994 to those persons who pay the declared tax dues.”

26. Central Board of Indirect Taxes and Customs issued circular dated 27th August, 2019 informing all the Principal Chief Commissioners/Chief Commissioners/Principal Director Generals and Director Generals that the Central Government had announced the scheme as part of the union budget for the year 2019-20. The aforesaid authorities were also informed about notification of Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019. It was stated thus :-

“2. As may be appreciated, this scheme is a bold endeavour to unload the baggage relating to the legacy taxes viz. central excise and service tax that have been subsumed under GST and allow business to make a new beginning, and focus on GST. Therefore, it is incumbent upon all officers and staff of CBIC to partner with the trade and industry to make this scheme a grand success.

3. Dispute resolution and amnesty are the two components of this scheme. The dispute resolution component is aimed at liquidating the legacy cases locked up in litigation at various forums whereas the amnesty component gives an opportunity to those who have failed to correctly discharge their tax liability to pay the tax dues. As may be seen, this scheme offers substantial relief to the taxpayers and others who may potentially avail it. Moreover, the scheme also focuses on the small taxpayers as would be evident from the fact that the extent of relief provided is higher in respect of cases involving lesser duty (smaller taxpayers can generally be expected to face disputes involving relatively lower duty amounts).”

27. Thus from the above, it is seen that the Central Board of Indirect Taxes and Customs (briefly ‘the Board’ hereinafter) had conveyed to all the departmental heads that the scheme is a bold endeavour to unload the baggage relating to the legacy taxes, namely, central excise and service tax which have been subsumed under GST and to allow business to make a new beginning and to focus entirely on GST. It was emphasized that all officers and staff should partner with trade and industry to make the scheme a grand success. It was highlighted that dispute resolution and amnesty are the two components of this scheme. The dispute resolution component is aimed at liquidating the legacy cases whereas the amnesty component gives an opportunity to those who have failed to correctly discharge their tax liability to pay the tax dues. After saying so, the Board concluded as under :-

“12. The Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 has the potential to liquidate the huge outstanding litigation and free the taxpayers from the burden of litigation and investigation under the legacy taxes. The administrative machinery of the Government will also be able to fully focus on helping the taxpayers in the smooth implementation of GST. Thus, the importance of making this scheme a grand success cannot be overstated. The Principal Chief Commissioners/Principal Directors General/ Chief Commissioners /Directors General and all officers and staff are instructed to familiarize themselves with this scheme and actively ensure its smooth implementation.”

28. Before adverting to the relevant provisions of the scheme, we may also note that in Capgemini Technology Services India Limited Vs. Union of India, MANU/MH/1428/2020, this Court after examining various provisions of the scheme held as under :-

“20. From the above, we find that as a one time measure for liquidation of past disputes of central excise and service tax, the SVLDR scheme has been issued by the Central Government. The SVLDR scheme has also been issued to ensure disclosure of unpaid taxes by an eligible person. This appears to have been necessitated as the levy of central excise and service tax has now been subsumed in the new GST regime. From a reading of the statement of object and reasons, it is quite evident that the scheme conceived as a one time measure, has the twin objectives of liquidation of past disputes pertaining to central excise and service tax on the one hand and disclosure of unpaid taxes on the other hand. Both are equally important: amicable resolution of tax disputes and interest of revenue. As an incentive, those making the declaration and paying the declared tax verified and determined in terms of the scheme would be entitled to certain benefits in the form of waiver of interest, fine, penalty and immunity from prosecution. This is the broad picture the concerned authorities are to keep in mind while dealing with a claim under the scheme.”

29. Thus after observing that the scheme has the twin objectives of liquidation of past disputes pertaining to the subsumed taxes on the one hand and disclosure of unpaid taxes on the other hand, it was observed that the concerned authorities should keep in mind the broad picture while dealing with a claim under the scheme.”

20. After dilating on various provisions of the scheme which were relevant for adjudication in Thought Blurb (supra), this Court further held as under:-

“52. We have one more reason to take such a view. As has rightly been declared by the Hon’ble Finance Minister and what is clearly deducible from the statement of object and reasons, the scheme is a one time measure for liquidation of past disputes of central excise and service tax as well as to ensure disclosure of unpaid taxes by a person eligible to make a declaration. The basic thrust of the scheme is to unload the baggage of pending litigations centering around service tax and excise duty. Therefore the focus is to unload this baggage of pre-GST regime and allow business to move ahead. We are thus in complete agreement with the views expressed by the Delhi High Court in Vaishali Sharma Vs. Union of India, MANU/DE/1 529/2020 that a liberal interpretation has to be given to the scheme as its intent is to unload the baggage relating to legacy disputes under central excise and service tax and to allow the business to make a fresh beginning.

53. * * * *

54. As discussed above, though the scheme has the twin objectives of liquidation of past disputes pertaining to central excise and service tax on the one hand and disclosure of unpaid taxes on the other hand, the primary focus as succinctly put across by the Hon’ble Finance Minister in her budget speech is to unload the baggage of pending litigations in respect of service tax and central excise from pre-GST regime so that the business can move on. This was also the view expressed by the Board in the circular dated 27th August, 2019 wherein all the officers and staff working under the Board were called upon to partner with trade and industry to make the scheme a grand success which in turn will enable the administrative machinery to fully focus in the smooth implementation of GST. This is the broad picture which the officials must have in mind while considering an application (declaration) seeking amnesty under the scheme. The approach should be to ensure that the scheme is successful and therefore, a liberal view embedded with the principles of natural justice is called for.”

21. Having regard to the discussions made above and what we have held in Capgemini Technology Services India Limited (supra) and Thought Blurb (supra), declaration of the petitioner filed under the scheme on 23.12.2019 has to be construed to be one under the ‘pending litigation category’. Accordingly, the matter is remanded back to the Designated Committee to take a fresh decision as to the consequential relief to be granted to the petitioner, including refund of the amount paid by the petitioner, treating the declaration of the petitioner as one under the ‘pending litigation category’ after affording reasonable opportunity of hearing to the petitioner. This shall be done within a period of four weeks from the date of receipt of a copy of this judgment. Both the questions are answered accordingly.

22. Writ petition is accordingly allowed. However, there shall be no order as to costs.

23. This order will be digitally signed by the Private Secretary of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order.