The Bombay High Court in a recent ruling while allowing the writ petition filed by the assessee held that taxpayers would not be deprived of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVL DRS-1) benefit for pending change of accounting code by authorities.
Petitioner National Centre for the Performing Arts is a public trust registered under the Societies Registration Act, 1860 and is a non profit institution registered under Service Tax Law and is subsequently also registered under GST Law and is engaged in providing various services such as holding entertainment events, renting out auditoriums, sponsorship etc., some of which services were/are liable to service tax/GST and some were exempt and some were partly taxable and partly exempt.
When the audit was conducted the Principal Commissioner, Central Goods and service Tax issued Show Cause Notice for demanding a sum of Rupees 2 crore as service tax for alleged wrong availment of CENVAT credit by the Petitioner along with applicable interest and penalty under Section 78 of Chapter V of the Finance Act, 1994. While the show caused notice ending before the authority petitioner requested E-pay and Accounts Officer to transfer the interest amount to another account number.
Thereafter the Assistant Commissioner of GST requested Petitioner to inform the reason for change of accounting code, While the Show Cause Notice and the request above by the Petitioner were pending, the Government notified the SVLDRS Scheme to provide an amnesty under legacy taxes, in particular Central Excise Duty and the Service Tax, which were subsumed in GST. Under the scheme tax payers could file online declarations for resolution of past disputes.
After Petitioner filed an online declaration in Form SVLDRS-1 declaring nil amounts as payable against the Service Tax. Thereafter the designated Committee did not accept Petitioner’s arguments and issued Form SVLDRS-3 with final amount payable by the petitioner and held that petitioner is not eligible for deduction. Against this order assessee filed this writ petition.
Vijay Kantharia counsel for respondents submitted that the amount of interest in respect of which deduction is sought by Petitioner did not form part of the service tax payments and therefore, the Designated Committee has rightly not considered the same while issuing Form-3.
Chirag Shetty counsel for the petitioner submit that “any amount paid as deposit or pre-deposit to be deducted when issuing the statement indicating the amount payable by the declarant, the Designated Committee has gone ahead and not given credit for the amount of interest already paid by Petitioner prior to the issuance of Show Cause Notice by the department”
After considering the contention of the both parties the division bench of high court of Bombay consisting Nitin Jamdar and Abhay Ahuja, allowed the writ petition and observed that Petitioner could not be deprived of the benefits of this scheme just because the amount of interest was deposited under Accounting Code 00441481 (Other Receipts (interest)) and not under 00441480 in respect of tax receipts which change of Accounting Code was pending with the Respondents Authorities at the time of filing of Form SVLDRS-1 by the Petitioner
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