GST & Excise Officer has no Power to Adjudicate until SVLDRS discharge Certificate Revoked by Designated Committee: Madras HC [Read Order]

The Madras High Court has decided that the Joint Commissioner of GST & Central Excise cannot cannot proceed until the Sabka Vishwas Discharge Certificate Revoked by Designated Committee. The court added that the powers of the adjudicating authority’s jurisdiction is limited under Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 ( SLVDRS ).  

A Single bench of Justice Mohammed Shafeeq stated that “The authority / power to revoke or cancel the Discharge Certificate on the premise that the material particulars furnished in the Discharge Certificate is false, lies with the exclusive jurisdiction of the Designated Committee.”

The issue before the Court is whether the adjudicating authority, i.e., the Central Excise Officer, has the authority to proceed with adjudication for a period and subject for which a Discharge Certificate has been issued under the SVLDRS.

The petitioner, a partnership firm involved in executing works contracts, received a show cause notice in November 2019 alleging non-filing of returns and non-payment of appropriate service tax. Subsequently, the SLVDRS was introduced by the Central government to resolve long-pending disputes.

The petitioner filed a declaration under the Scheme for the period from April 2014 to June 2017 and paid the disclosed tax dues. A Discharge Certificate was issued on 12.07.2020. Despite this, an order of adjudication was passed on 27.03.2021, rejecting the petitioner's submission that adjudication should be dropped due to their participation in the SVLDRS.

The petitioner argued that the subsequent order of adjudication, lacking the revocation or cancellation of the Discharge Certificate issued under the SVLDRS by the Designated Committee—the body authorised to do so—lacks jurisdiction.

The bench of Justice Mohammed Shafeeq sets aside the order issued by the adjudicating authority for following reasons:

1. Once the Discharge Certificate is issued by the Designated Committee it is not open to proceed with adjudication.
2. The authority / power to revoke or cancel the Discharge Certificate on the premise that the material particulars furnished in the Discharge Certificate is false, lies with the exclusive jurisdiction of the Designated Committee.
3. To assume Adjudicating Authority / Central Excise Officers to have the power to revoke or cancel Discharge Certificate issued by the Designated Committee which may comprise of officers superior in rank to that of the Central Excise Officers carrying out adjudication would result in distortion of Administrative / Institutional Hierarchy.
4. In the absence of the Discharge certificate being revoked / cancelled by the Designated Committee, adjudication by the Central Excise officers could result in plurality of orders on the same subject conflicting with each other, which ought to be avoided.

The high court found that the adjudicating authority's jurisdiction is limited under the SVLDRS, and the power to revoke or cancel a Discharge Certificate lies exclusively with the Designated Committee. It was added that the adjudicating authority cannot independently determine the falsity of particulars in the declaration. Therefore, the impugned order is set aside, and the writ petition is disposed of with no costs.

To Read the full text of the Order CLICK HERE

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