The Bombay High Court held that rejection of the application of declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR) communicated via email was not justified.
The petitioner, Thought Blurb is a partnership firm duly registered under the Partnership Act, 1932 engaged in the business of providing advertising and design services to its customers. Petitioner was registered as a service provider under the Finance Act, 1994.
The Service tax authorities initiated investigation against the petitioner pertaining to payment of service tax for two periods. The respondent authority informed the petitioner regarding the enquiry being conducted against it.
It was stated that the petitioner had not paid service tax liability of Rs.47,44,937 for the period 2016-17.
Accordingly, the petitioner was requested to immediately pay the service tax liability along with applicable interest and penalty. Petitioner was also requested to file the return for the year 2017-18 and to pay the service tax liability along with applicable interest and penalty.
In the meanwhile, the Central Government introduced the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 to bring an end to pending litigations under the earlier indirect tax regime which now stood subsumed under the Goods and Services Tax.
According to the petitioner, it filed electronic declaration on 12th December, 2019 i.e. Form No.SVLDRS 1 declaring an amount of Rs.59,54,669 as the tax dues payable. The category under which the application (declaration) was filed was investigation, enquiry or audit. It was disclosed that an amount of Rs.30,60,257 was paid as pre-deposit.
However, by e-mail dated 27th January, 2020 respondents rejected the application of the petitioner on the ground of ineligibility with the remark that tax dues were not finalized as on 30th June, 2019.
The division bench of justice Ujjal Bhuyan and Justice Abbay Ahuja clarified that the scheme 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, the primary focus as succinctly put across by the Finance Minister in her budget speech is to unload the baggage of pending litigations in respect of service tax and central excise from pre-GST regime so that the business can move on.
The court while setting aside the rejection of the application held that rejection of the application (declaration) of the Petitioner under the scheme communicated vide email dated 27th January, 2020 is not justified.
The court directed the designated committee to further decide the application (declaration) of the petitioner dated 12th December, 2019 afresh after giving an opportunity of hearing to the petitioner who shall be informed about the date, time and place of hearing.
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