Kaarya Facilities & Services Ltd Vs Union of India (Bombay High Court)
In a significant ruling for Kaarya Facilities & Services Ltd., the Bombay High Court has set aside the rejection of its application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS Scheme). The court clarified the interpretation of “tax dues quantified” as required by the scheme, providing relief to the petitioner who faced an addition of service tax liability. The decision, delivered in an appeal against the rejection, highlighted a factual misinterpretation by the tax authorities regarding the nature of Kaarya Facilities’ business and the quantification of its tax liability.
The dispute centered on the rejection of Kaarya Facilities’ SVLDRS application on the grounds that its tax dues were not quantified by the crucial date of June 30, 2019. The Directorate General of Goods and Services Tax Intelligence (DGGI) had communicated this alleged ineligibility. However, the High Court scrutinized the provisions of the SVLDRS Scheme, specifically referring to Section 2(r) of the Finance (No.2) Act, 2019, which defines “quantified” as a written communication of the amount of duty payable. Crucially, the court also considered CBIC Circular dated August 27, 2019, and the Frequently Asked Questions (FAQs) issued by the department on December 24, 2019. These clarifications state that written communication includes a letter intimating duty demand, duty liability admitted during an inquiry, investigation, or audit, or an audit report.
