Case Law Details

Case Name : B-Earth And Spire India Pvt. Ltd Vs Central Board of Indirect Tax And Customs & Ors. (Delhi High Court)
Appeal Number : W.P.(C) 10843/2020
Date of Judgement/Order : 14/01/2021
Related Assessment Year :
Courts : All High Courts (6443) Delhi High Court (1676)

B-Earth And Spire India Pvt. Ltd Vs Central Board of Indirect Tax And Customs & Ors. (Delhi High Court)

Mr. Harpreet Singh, on instructions from Deputy Commissioner (Legal), CGST (South), submits that at the time of submission of the Form SVLDRS-I, the returns of the Petitioner were not visible on the GST portal. However, he does not dispute that the returns had been indeed filed by the Petitioner. He submits that perhaps on account of some technical glitch, the returns so filed by the Petitioner were not being reflected on the GST portal, but nevertheless, it is now being shown in the records of the GST department.

In view of the statement made by Mr. Harpreet Singh, there is no surviving factual controversy, as indeed the returns filed by the Petitioner are available with the Respondents. Certainly, the technical infraction at the end of the Respondent cannot be a ground to deprive the Petitioner the benefit of the Scheme. Thus, clearly, the ground on the basis of which the Petitioner’s application has been rejected does not survive, and is liable to be set-aside.

In this view of the matter, there is no impediment for the Court in allowing the Petitioner’s request and we accordingly do so and set aside the impugned Statement dated 28th February, 2020 passed by the Respondent No. 2. Further direction is issued to the Respondent No. 4 to accept the Petitioner’s Form SVLDRS-I and process the same under Section 126 of the Finance Act, 2019.

FULL TEXT OF THE HIGH COURT ORDER /JUDGEMENT

1. By way of the present petition under Article 226 of the Constitution of India, the Petitioner impugns the Statement dated 28th February, 2020 issued by the Respondent No. 4 under Form SVLDRS-I of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (hereinafter referred to as the SVLDR Scheme”). Briefly stated, the Petitioner is a company engaged in the business of housekeeping services to corporate customers within the National Capital Territory of Delhi and was registered with Service Tax Department under the Finance Act, 1994. The Petitioner applied under the SVLDR Scheme introduced under Chapter V of the Finance Act, 2019. However, his case was rejected by recording remarks in the Petitioner’s Form SVLDRS-I that no return had been filed by the Petitioner for the period from 1st April, 2016 to 30th September, 2016 (hereafter referred to as “relevant period”). The Petitioner also received an SMS dated 28th February, 2020 apprising him of rejection of his SVLRDS form. The impugned statement in Form SVLDRS-1 was also issued on the same date. Mr. Tarun Gulati, learned Senior Counsel appearing on behalf of the Petitioner contends that the decision of the Respondent to reject the Petitioner’s application is completely baseless, inasmuch as the Petitioner had indeed filed its return for the relevant period on 12th July, 2017. He submits that this fact has been completely overlooked by the Respondents and the impugned remarks, consisting of the impugned statement in Petitioner’s Form SVLDRS-I dated 28th February, 2020, read with the impugned communication dated 28th February, 2020 sent by SMS by the office of the Respondent No. 4, have resulted in the Petitioner being deprived of the relief available under the SVLDR Scheme.

2. Mr. Gulati, further submits that the Petitioner is eligible to claim these reliefs in terms of the circulars issued by the Respondents. He places reliance on a Circular No. 1072/05/2019-CX dated 25th September, 2019, the relevant portion whereof is extracted herein below:-

“(iv) Section 121 (c) defines an amount in arrears as the amount of duty which is recoverable as arrears of duty. Further, Section 123 defines ‘tax dues’ in respect of arrears as the amount which is due in arrears. In other words, tax dues is the amount of duty which is outstanding against the declarant. This is the net amount after deducting the dues that he has already paid. Such payment may be in the form of pre-deposits appropriated or paid subsequently by the taxpayer voluntarily against the outstanding amount. It is clarified that the relief available under Section 124(1)(c) will be applied to the net outstanding amount so arrived at. It may be noted that in respect of all other categories, any money paid before its appropriation is in the nature of a deposit only. Hence, in respect of declarations made under these other categories, the relief will be applied to the outstanding amount and, only thereafter the pre-deposits/deposits [Section 124(2)] shall be adjusted. The same is illustrated as follows:

(a) Taxpayer has outstanding arrears of confirmed duty demand of Rs. 1 crore and he has already paid Rs. 60 lakhs. So, the amount of tax dues is Rs 40 lakhs. After applying applicable relief @ 60%, the amount payable under the Scheme is Rs 16 lakhs.

(b) Taxpayer has outstanding arrears of confirmed duty demand of Rs 1 crore apart from Rs 20 lakh penalty and interest as applicable. He has already paid Rs 1 cr towards duty. So, the amount of tax dues is zero, and the amount payable under the Scheme is zero.”

3. Besides, reliance is also placed on a Circular No. 1073/06/2019.CX dated 29th October, 2019, the relevant portion whereof is extracted below:-

“2 (iii). A doubt has also been expressed whether a party who has filed an ST-3 return and has also paid the dues in FULL before filing the application but still wants to avail the benefits of the scheme for interest on the late paid dues is eligible. In this regard, attention is invited to illustrations (a) and (b) under Para 2(iv) of Circular No. 1072/05/2019-CX dated 25.09.2019, given in the context of arrears of confirmed demand. It is clarified that these also cover the cases of arrears of tax liability admitted under returns filed on or before 30.06.2019.”

4. On 22nd December 2020, when the petition was listed for hearing for the first time, Mr. Harpreet Singh, learned Senior Standing Counsel for the Respondents who appeared on advance notice, sought time to take instructions with respect to the controversy regarding the filing of the service tax return. Today, Mr. Harpreet Singh, on instructions from Deputy Commissioner (Legal), CGST (South), submits that at the time of submission of the Form SVLDRS-I, the returns of the Petitioner were not visible on the GST portal. However, he does not dispute that the returns had been indeed filed by the Petitioner. He submits that perhaps on account of some technical glitch, the returns so filed by the Petitioner were not being reflected on the GST portal, but nevertheless, it is now being shown in the records of the GST department.

5. In view of the statement made by Mr. Harpreet Singh, there is no surviving factual controversy, as indeed the returns filed by the Petitioner are available with the Respondents. Certainly, the technical infraction at the end of the Respondent cannot be a ground to deprive the Petitioner the benefit of the Scheme. Thus, clearly, the ground on the basis of which the Petitioner’s application has been rejected does not survive, and is liable to be set-aside.

6. In this view of the matter, there is no impediment for the Court in allowing the Petitioner’s request and we accordingly do so and set aside the impugned Statement dated 28th February, 2020 passed by the Respondent No. 2. Further direction is issued to the Respondent No. 4 to accept the Petitioner’s Form SVLDRS-I and process the same under Section 126 of the Finance Act, 2019. Needless to say, at the time of consideration and processing of the Petitioner’s application, the Respondent will take into consideration the circulars dated 25th September, 2019 and 29th October, 2019 quoted hereinabove. In case the Petitioner is found to be eligible in terms thereof, the necessary discharge certificate will be issued, allowing all consequential benefits in terms of the provision of the SVLDR Scheme.

7. The petition is allowed.

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