The Orissa High Court Directs Designated Committee to conduct personal hearing for the purpose of the Department/Designated Committee to conclude on petitioner’s assertion that 50% or more of the demand was paid and it is entitled to relief against the balance, under the scheme.
It was found that show cause notice SCN alleging short payment of service tax under CGST while the petitioner applied under Sabka Vikas ( Legacy Dispute Resolution ) Scheme, 2019 in prescribed form SVLDRS-1.
Know When to Say No to Cash Transactions, Click Here
Orissa Stevedores Ltd, the petitioner submitted that a show cause notice ( SCN ) was issued alleging short payment of service tax for period 2013-14. Pursuant to receiving the SCN, the petitioner applied under Sabka Vikas ( Legacy Dispute Resolution ) Scheme, 2019 in prescribed form SVLDRS-1. The SCN demanded for tax in excess of ₹16.15 crores. In the form his client had claimed a deposit of duty at almost ₹10 crores.
Revenue issued SVLDRS-2 reiterating tax due on allegation that there was zero pre-deposit. The petitioner had claimed adjustment of CENVAT credit at approximately ₹19.15 crores and made cash payment of ₹26 crores. It was stated that thereby stands demonstration that the adjustment and payments were for financial year 2013-14. This was not taken into account in issuing, SVLDRS-2 and thereafter SVLDRS-3.
Know When to Say No to Cash Transactions, Click Here
Mr. Sahoo, counsel appearing for the petitioner, relied on the circular dated 27th August, 2019 issued by Government of India, Ministry of Finance Department of Revenue, Central Board of Indirect Taxes and Customs. He pointed out from clause (c) in paragraph 10 that even disputed amount of CENVAT credit is to be adjusted under the scheme.
The petitioner moved Court to show pre-deposit by aggregate of cash and credit. Inspite thereof, upon issuance of SVLDRS-3 and during pendency of the writ petition, notice was issued, purportedly to give opportunity of personal hearing. This notice is perpetration of the department’s contention that the petitioner is not entitled to the relief under the scheme.
Mr. Satapathy,Senior Standing Counsel appeared on behalf of revenue opposed the writ petition. He submitted that particulars of the cash payments, brought on record from information obtained include payments made for other period(s). So far as the CENVAT credit is concerned, it was disallowed. It cannot be adjusted.
Know When to Say No to Cash Transactions, Click Here
A division bench of Justice Arindam Sinha and Justice M.S. Sahoo directed that the personal hearing will be for the purpose of the Department/Designated Committee to conclude on petitioner’s assertion that 50% or more of the demand was paid and it is entitled to relief against the balance, under the scheme.
It was further held that “The Department/Designated Committee will do well to pass a reasoned order such that points urged by petitioner in the writ petition and as may be urged before it regarding the scheme applying to it, are dealt with without leaving any ambiguity. In event the Department/Designated Committee concludes that petitioner is not entitled to relief under the scheme, it will then issue fresh notice for personal hearing on the demand. We make this direction in view of clause (c) in aforesaid circular dated 27th August, 2019 and absence of anything on record or submission made that exercise of reconciliation was undertaken in respect of the particulars of the cash payments. “
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
