Case Law Details

Case Name : ACNielsen Research Services Pvt. Ltd. Vs. Union of India (Bombay High Court)
Appeal Number : WP (L) No. 6716 of 2022
Date of Judgement/Order : 16/11/2022
Related Assessment Year :

ACNielsen Research Services Pvt. Ltd. Vs. Union of India (Bombay High Court)

The petitioner had an appeal pending before the Hon’ble CESTAT. The petitioner has deposited a sum for the said appeal. The petitioner availed benefit of SVLDR Scheme. It filed SVLDRS Form 1. Form 3 was issued. It paid the directed sum in time. However, revised Form 3 was issued. The petitioner prayed that already sum was paid, to no avail. To buy peace, the petitioner paid the said sum again in December, 2020. Benefit under the Scheme was rejected on the ground that payment was made beyond 30.06.2020. Hence, petition was filed.

The Hon’ble Court allowed the petition. It was held that rectified Form 3 was contrary to section 128 of the Scheme. It was issued beyond time. It also could not be issued as the section allows correction of clerical or typographical error. It does not allows re-examination. Holds rejection is contrary to the object of the Scheme. Follows judgment in the case of Thought Blurb. Allows petitioner to claim refund of the amount paid before CESTAT.

FULL TEXT OF THE JUDGEMENT/ORDER OF BOMBAY HIGH COURT

1 Petitioner is service provider whose records came to be audited for the period 2004-05 to 2008-09. After investigation, Petitioner came to be issued a show cause notice alleging non-payment of service tax. Thereafter show cause notices were issued for subsequent period, i.e., 2009-10, 2010-11, 2011-12 and 2012-13. Petitioner replied to each of the show causes notices.

2 By an Order in Original a demand of Rs.1,41,76,288/- out of original demand of Rs.33,61,55,846/- was confirmed. Petitioner filed Appeal bearing No.85931/15-Mum before the Customs, Excise and Service Tax Appellate Tribunal, Mumbai (CESTAT). Petitioner also deposited a sum of Rs.18,29,561/-.

3 In 2019 the Government of India came up with Sabka Vishwas (Legacy Dispute Resolution) Scheme (SVLDRS). Petitioner decided to avail of the scheme and filed declaration in Form No.SVLDRS-1 on 23 rd September 2019. Petitioner declared Rs.1,41,76,288/- as amount of tax dues. As per the scheme, the amount payable was fifty percent of the tax dues i.e. 70,88,144/-. This is not in dispute. In declaration in Form No.SVLDRS-1 filed by Petitioner, Petitioner declared a sum of Rs.18,29,561/- as the amount deposited by Petitioner earlier. Amount required to be paid by Petitioner under the scheme, therefore, was Rs.52,58,583/-.

4 On 28th November 2019, Respondent Nos.3 and 4 issued Form No.SVLDRS-3 to Petitioner directing Petitioner to make payment of Rs.52,58,583/- to avail the benefit under the scheme. On 27th December 2019, within the time provided, Petitioner paid this amount of Rs.52,58,583/-. That is also not disputed.

5 In Form No.SVLDRS-3 that was issued on 28th November 2019 Respondents state, “……… the designated committee, after consideration of relevant material, hereby determines the following amount is payable by the declarant towards full and final settlement of tax dues under Finance Act, 1994.”

6 Petitioner was waiting for Respondents to issue Form No.SVLDRS-4, i.e., Discharge Certificate to be issued.

7 On or about 20th January 2020 Respondent Nos.3 and 4 issued rectified Form No.SVLDRS-3 calling upon Petitioner to deposit further sum of Rs.8,41,497/- to avail the benefit under the scheme. Petitioner, in response, by a letter dated 13th February 2020 submitted that it had made pre-deposit of Rs.8,41,497/-. As per Respondent Nos.3 and 4 they had to issue rectified Form No.SVLDRS-3 because amount of Rs.3,53,723 and Rs.4,87,774/- (totaling to Rs.8,41,497) claimed as pre-deposit amount under the show cause notice/Order in Original has not been appropriated therein. Rather the adjudicating authority has observed, “I fail to understand how service tax has been paid on 24-03-2005 on the amount admittedly received from TAM media in 2006-07. Evidently the claim of notice is contrary to facts on record. Thus SVLDRS 3 issued earlier is revised”. There was no response to this letter dated 13th February 2020.

8 It is Petitioner’s case that on 22nd March 2020 complete nationwide lockdown was declared due to Covid-19 pandemic, and since there was no response from Respondent Nos.3 and 4, Petitioner finally paid amount of Rs.8,41,497/- on 18th December 2020. It is Petitioner’s case that there has been double payment, but nevertheless to put an end to the entire matter, Petitioner paid this amount.

9 Respondent Nos.3 and 4 have now rejected Petitioner’s declaration on the ground that Petitioner did not pay this amount of Rs.8,41,497/- within 30 days of issuance of rectified Form No.SVLDRS-3 or within the extended period of 30th June 2020.

10 It is submitted that as a one time measure for liquidation of past disputes of Central Excise and Service Tax, the SVLDR Scheme has been introduced by the Central Government. The scheme has also been issued to ensure disclosure of unpaid taxes by an eligible person.

11 The intent and object of the scheme is to minimize the litigation and put a closure to all pending litigations. The Hon’ble Finance Minister in her maiden budget speech proposed a dispute resolution scheme called the SVS, 2019:

“An area that concerns me is that we have huge pending litigations from the pre-GST regime. More than Rs.3.75 lakh crore is blocked in litigations in service tax andexcise. 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.”

From the above, it is clear that revenue must be augmented and tax be collected without getting into other issues.

12 The Petitioner is willing to pay tax but, is facing the brunt of illegal rejection. Hence, not allowing Petitioner to avail the benefit under the scheme appears bad-in-law.

13 In support of the submissions, Mr. Raichandani sought to place reliance on the judgments of this Court in Capgemini Technology Services India Limited v/s. The Union of India 1 and Thought Blurb v/s Union of India and ors.2 This Court in Capgemini Technology Services India Limited (supra) held as under :-

“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 as determined in terms of the scheme would be entitled to certain benefits in the form 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.

14 In our view, therefore, Petitioner having made payment, even if, there was a delay for which reasons are mentioned in the Petition, Respondent Nos. 3 and 4 should have accepted the amount and issued Form No.SVLDRS-4.

15 At the same time, even for the moment we accept Mr.Mishra’s submission that Court should not grant extension of time that is not provided in the scheme because that would amount to modifying the scheme which is prerogative of the Government, the point that comes for consideration before us is, whether Respondent Nos.3 and 4 could have even issued rectified Form No.SVLDRS-3.

Section 128 of the Finance Act, 2019 reads as under :-

128 Rectification of errors.

Within thirty days of the date of issue of a statement indicating the amount payable by the declarant, the designated committee may modify its order only to correct an arithmetical error or clerical error, which is apparent on the face of record, on such error being pointed out by the declarant or suo motu, by the designated committee.

(Emphasis Supplied)

16 Therefore designated committee could certainly have issued rectified Form No.SVLDRS-3 within thirty days of the date of issue of the original Form No.SVLDRS-3. Original Form No.SVLDRS-3 was issued on 28th November 2019. Therefore, thirty days would have expired, even if we exclude the date of issuance, on 28th December 2019. But the rectified Form No.SVLDRS-3 was issued on 20th January 2020, and therefore, the said rectified Form No.SVLDRS-3 was not valid Form since the same has been issued contrary to the provisions of Section 128.

17 Moreover under Section 128 the designated committee can modify its order only to correct an arithmetical error or clerical error which is apparent on the face of record. The remarks in the rectified Form No.SVLDRS-3, as menioned above, by any stretch of imagination, can not be called an arithmetical or clerical error that was apparent on the face of record. On this ground also rectified Form No.SVLDRS-3 has to be set aside. In any event the details which have been referred to in the remarks column of rectified Form No.SVLDRS-3 were already available with Respondent Nos.3 and 4 before they issued original Form-3 where a positive statement was made that after consideration of relevant material, the designated committee has determined that a sum of Rs.52,58,583/- was payable by Petitioner.

18 We should also note that in the affidavit in reply Respondents state that Petitioner wrongly declared Rs.18,29,561 as the pre-deposit whereas Petitioner was entitled only for the predeposit amount of Rs.9,88,064/-. If that was the case as required under the Finance Act and Rules framed thereunder, Respondent Nos. 3 and 4 should have issued Form No.SVLDRS-2 to Petitioner declaring therein the amount Petitioner will have to pay and Petitioner could have responded to it by submitting Form No.SVLDRS-2A. This also was given a go by. Therefore Respondents cannot go back and rectify original Form No.SVLDRS-3 issued on 28th November 2019.

19 In the circumstances, Petitioner is directed to issue Form No.SVLDRS-4 within two weeks of this order being uploaded accepting the amount of Rs.52,58,583 as paid in full and final settlement on 28th November 2019 pursuant to original Form No.SVLDRS-3.

20 We also note Mr.Raichandani’s statement that he is not pressing prayer clause (c) of the Petition, i.e., Petitioner will not seek refund of Rs.8,41,497/- that Petitioner paid against rectified Form No.SVLDRS-3.

21 Petitioner may, however, apply to CESTAT for refund of the pre-deposit of Rs.18,29,561/- made while filing Appeal bearing No.85931/15-Mum before CESTAT, and the concerned assessing officer shall within thirty days of receiving the application, grant the refund together with applicable interest, if any.

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