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2020 DIGILAW 1525 (ALL)

Beenu Gupta v. Union of India

2020-12-18

SURYA PRAKASH KESARWANI, YOGENDRA KUMAR SRIVASTAVA

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JUDGMENT : 1. Heard learned counsel for the petitioner and learned Standing Counsel for the State respondents. 2. This writ petition has been filed praying for the following reliefs: (a) Issue a writ, order or direction in the nature of certiorari quashing the illegal rejection of declarations dated 15.1.2020 and 25.12.2019 by respondent no. 3 designated committee, as disclosed in remarks column in Form SVLDRS-1 dated 15.1.2020 and 25.12.2019 (Annexure-4 and 6) submitted electronically by petitioner. (b) Issue a writ, order or direction in the nature of mandamus directing respondent no. 3 to process and accept the declarations dated 15.1.2020 submitted electronically by petitioner under the provisions of Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. (c) Issue any other writ, order or direction, which this Hon'ble Court may deem fit in the facts and circumstances of the case. (d) Award costs of the petition to the petitioner. 3. Learned counsel for the petitioner submits that the petitioner has deposited the amount along with returns belatedly and therefore arose some interest liability which the petitioner could not deposit, and therefore, the petitioner has filed a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (hereinafter referred to as ‘SVLDR Scheme’) but the declaration has been wrongly rejected by the impugned orders. 4. We have perused the impugned orders and we find that the designated authority has rejected declaration on the ground that “as per report of the division vide letter dated 13.01.2020, no duty amount has been declared in return as payable but not paid. Hence not covered under the category of arrears.” 5. Clause (c) of Section 121 defines the words “amount in arrears.” Clause (d) defines the words “amount of duty.” Both the clauses (c) and (d) of Section 121 of Finance (No. 2) Act, 2019 are reproduced below: (c) “amount in arrears” means the amount of duty which is recoverable as arrears of duty under the indirect tax enactment, on account of: (i) no appeal having been filed by the declarant against an order or an order in appeal before expiry of the period of time for filing appeal. (ii) an order in appeal relating to the declarant attaining finality. (iii) the declarant having filed a return under the indirect tax enactment on or before the 30th day of June, 2019, wherein he has admitted a tax liability but not paid it. (ii) an order in appeal relating to the declarant attaining finality. (iii) the declarant having filed a return under the indirect tax enactment on or before the 30th day of June, 2019, wherein he has admitted a tax liability but not paid it. (d) “amount of duty” means the amount of central excise duty, the service tax and the cess payable under the indirect tax enactment. 6. Section 123 of the SVLDR Scheme defines the words 'tax dues” for the purposes of the Scheme. 7. Learned counsel for the petitioner has admitted before us that the case of the petitioner does not fall under clause (a) or (b) of Section 123 of the SVLDR Scheme. 8. Learned counsel for the petitioner has placed reliance on clauses (c), (d) and (e) of Section 123, which are reproduced below: (c) where an enquiry or investigation or audit is pending against the declarant, the amount of duty payable under any of the indirect tax enactment which has been quantified on or before the 30th day of June, 2019. (d) where the amount has been voluntarily disclosed by the declarant, then, the total amount of duty stated in the declaration. (e) where an amount in arrears relating to the declarant is due, the amount in arrears. 9. The definition of the words “tax dues” as provided in Section 123 of the SVLDR Scheme shows that it is not expansive in nature inasmuch as it starts with the word “means.” 10. Clause-C of Section 123 relates to matters where any enquiry or investigation or audit is pending against the declarant, the “amount of duty” payable under any of the indirect tax enactment which has been quantified on or before 30th June, 2019. This clause is not applicable in the case of the petitioner inasmuch as it is not the case of the petitioner that any enquiry or investigation or audit is pending against him. 11. Clause (d) of Section 123 provides that where the amount has been voluntarily disclosed by the declarant, then the total amount of duty as stated in the declaration shall be the tax dues. The words “amount of duty” has been defined in clause (d) of Section 121 which means the amount of central excise duty, the service tax and the cess payable under the indirect tax enactment. The words “amount of duty” has been defined in clause (d) of Section 121 which means the amount of central excise duty, the service tax and the cess payable under the indirect tax enactment. The petitioner has deposited the amount of duty along with his regular returns under the service tax law but it was filed belatedly. Thus no amount of duty was payable under the service tax law, therefore the provisions of clause (d) of Section 123 has no application on the facts of the present case. 12. Clause (e) of Section 123 provides that where an amount in arrears relating to the declarant is due, the amount in arrears shall be the tax dues. The words “amount in arrears” has been defined in clause (c) of Section 121. Sub-Clause (iii) of clause (c) of Section 121 provides that the “amount in arrears” means the amount of duty which is recoverable as arrears of duty under the indirect tax enactment on account of the declarant having filed a return under the indirect tax enactment on or before the 30th day of June, 2019, wherein he has admitted a tax liability but not paid it. 13. The admitted facts of the present case are that the petitioner has filed return under the service tax law prior to 30th June, 2019 and deposited the amount of duty along with the returns which was filed belatedly. Therefore, clause (e) of Section 123 read with clause (c) of Section 121 of the SVLDR Scheme is not applicable on the facts of the present case. The circular relied by learned counsel for the petitioner has no application to the facts of the present case inasmuch as the circulars dated 25th September, 2019 and 29th October, 2019 relied by learned counsel for the petitioner is referable to sub-clause (iii) of clause (c) of Section 121 of the SVLDR Scheme. 14. Provisions of Chapter V of the Finance (No. 2) Act, 2019, whereby “Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019” has been enacted; is an offer by the Government to settle tax arrears locked in litigation at a substantial discount. Section 124 Finance (No. 2) Act 2019 provides the slabs of tax arrears and the discount slabs in percentage for payment by an applicant/declarant to settle the dispute. Section 124 Finance (No. 2) Act 2019 provides the slabs of tax arrears and the discount slabs in percentage for payment by an applicant/declarant to settle the dispute. Section 125 provides that all persons shall be eligible to make a declaration under the Scheme except those mentioned in Clauses (a) to (h). Section 126 empowers the designated Committee to verify the correctness of the declaration made by the declarant under Section 125 in the manner as may be prescribed. Section 127 of the Act empowers the designated Committee to issue statement indicating the amount payable by the declarant and in the event the amount estimated by the designated Committee exceeds the amount declared by the declarant then the designated Committee shall afford an opportunity of hearing to the declarant and thereafter issue a statement in electronic form indicating the amount payable by the declarant. Thereafter, the declarant shall pay the amount through internet banking and on payment the designated committee shall issue a discharge certificate in electronic form within 30 days of the payment and production of proof. Sub-Section 6 and Sub-Section 7 of Section 127 provides for withdrawal or deemed withdrawal of Appeal, Revision, Reference or Writs relating to the matter in question. Section 129 provides for certain immunities to the declarant. Section 130 prohibits payment through input tax credit account, refunds and to take input tax credit of the amount deposited under the Scheme. Section 131 provides for removal of doubts and Section 134 provides for removal of difficulties. Section 132 empowers the Central Government to make Rules by notification to carry out the provisions of the Scheme. Section 133 empowers the Central Board of Indirect Taxes to issue orders, instructions etc. Section 135 provides for protection to the Officers. 15. Thus, perusal of the provisions of the Scheme briefly noted above, shows that the Scheme is a complete Code in itself. In substance, it is a scheme for recovery of duty/indirect tax to unlock the frozen assets and to recover the tax arrears at a discounted amount. Thus “Sabka Vishwas Scheme” although a beneficial scheme for a declarant, is statutory in nature, which has been enacted with the object and purpose to minimise the litigation and to realise the arrears of tax by way of settlement at discounted amount in an expeditious manner. Thus “Sabka Vishwas Scheme” although a beneficial scheme for a declarant, is statutory in nature, which has been enacted with the object and purpose to minimise the litigation and to realise the arrears of tax by way of settlement at discounted amount in an expeditious manner. In other words the scheme is a step towards the settlement of outstanding disputed tax liability. 16. For all the reasons aforestated we do not find any merit in this writ petition. 17. Consequently, the writ petition fails and is hereby dismissed.