Case Law Details
Chaque Jour Hr Services Pvt. Ltd. Vs. Union of India & Ors. (Delhi High Court)
Section 129 nowhere contemplates fragmented settlement of tax dues. The discharge certificate issued under Section 126 with respect to the amount payable under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS’) is considered to be conclusive as to the matter and the time period stated therein. Under Clause (b) Sub Section 2 to Section 129, despite issuance of discharge certificate with respect to ‘a matter’ for ‘a time period’, the department is not precluded to issue a show cause notice, for ‘the same matter’, for ‘a subsequent time period’ or for ‘a different matter’ for ‘the same time period’. In this case, none of the aforesaid conditions would perhaps be attracted if the declarant is issued a discharge certificate. The extracted portion of circular dated 12th December, 2019 also has no application and deals with entirely different situation. All the demands in the show cause notice dated 13th March, 2020 arise from the same investigation. Thus, the demands raised therein pertain to the same matter and also same time period, although under different heads. Petitioner’s statement admitting its liability only to the extent of Service Tax, cannot be construed as quantification of ‘tax dues’ prior to 30th June, 2019.
Certainly, SVLDR is a beneficial scheme and purposive interpretation of its terms is desirable. However, we cannot give an interpretation that would run counter to its objective. The scheme is a one-time measure for liquidation of past disputes under the erstwhile regime and affords an opportunity of voluntary disclosure to non-compliant tax payers. The declarants are thus expected to come clean in order take its benefit. During investigation, Petitioner only admitted Service Tax liability and did not make any disclosure with respect to the other tax dues and as a result whereof, after investigation, Respondents have issued the demand-cum show cause notice for an amount of Rs. 13,77,13,890/-. This show cause notice would have to be adjudicated in entirety and cannot be done in a piecemeal manner. We cannot construe admitted tax liability to be ‘matter’ and the remainder dues as per show-cause notice to be a ‘separate matter’, especially since the investigation was still ongoing on the relevant date. Settlement under the SVLDRS scheme with respect to the Service Tax due, with continuation of parallel proceeding for the remainder or differential amount by way of adjudication of the show cause notice, would also not result in resolution of the legacy dispute, which is the predominant aim of the scheme.
We find no infirmity in the rejection of Petitioner’s declaration. The present petition is without any merit and hence it is dismissed.
FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT
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