The High Court of Bombay has held that the petitioner is eligible to benefit from the Sabka Vishwas (Legacy Dispute Resolution) Scheme (SVLDRS) as the tax liability is quantified before the cut-off date of the Scheme.
The ruling came in response to the writ petition filed by Gautam Hospitality Private Limited challenging the rejection of their application under the scheme.
The case revolved around the service tax liability of Gautam Hospitality Private Limited, a company engaged in the hospitality business. The petitioner’s service tax liability came under scrutiny following an investigation initiated by the Directorate General of Goods and Services Tax (GST) Intelligence in June 2017.
During the course of the investigation, the petitioner, represented by its director Mr. Satish Shetty, admitted to the service tax liability for the financial years 2013-14 to 2017-18, amounting to Rs. 3,77,61,635/-.
Despite the admission of liability, the petitioner faced hurdles in availing the benefits of the Sabka Vishwas Scheme due to procedural issues. The rejection of their application under the scheme was based on the ground that the duty liability was not quantified before the cut-off date of June 30, 2019, and that investigations were ongoing.
The petitioner, represented by Mr. Vipul Shah contended that their duty liability was indeed quantified before the cut-off date. The petitioner also cited declarations made on December 15, 2017, and March 26, 2019, as evidence of the quantification of their service tax liability.
The petitioner argued that the rejection of their application was contrary to the provisions of the Sabka Vishwas Scheme and the clarifications provided by the revenue department.
The respondent revenue, the Principal Commissioner GST and Central Excise
and another, argued against the petitioner’s eligibility under the Sabka Vishwas Scheme, citing ongoing investigations and non-quantification of duty liability before the cut-off date. They contended that the rejection of the petitioner’s application was justified based on these grounds.
The court found that the tax liability was quantified before the cut-off date based on documentary evidence provided by Gautam Hospitality Private Limited. The bench referenced declarations made by the petitioner on December 15, 2017, and March 26, 2019, wherein they admitted to their service tax liability.
The court held that these declarations were deemed sufficient to establish that the duty liability against the petitioner was quantified before the cut-off date of June 30, 2019, and hence they are eligible for benefits under the Sabka Vishwas (Legacy Dispute Resolution) Scheme.
The bench held that the duty liability was quantified before the cut-off date of June 30, 2019, specified in the Sabka Vishwas Scheme, making the petitioner eligible to avail the benefits of the scheme.
The court emphasised that the rejection of the petitioner’s application was unjustified, considering the clear provisions of the scheme and the clarifications provided by the revenue department.
In result, the division bench comprising Justice G. S. Kulkarni and Justice Firdosh P. Pooniwalla allowed the Writ Petition filed by the petitioner. The Show Cause Notices issued by the respondent revenue were quashed and the department was directed to consider the Petitioner’s application in accordance with law and accordingly pass appropriate orders within a period of six weeks.
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