Madras High Court
Shree Vijayalakshmi Charitable Trust vs The Designated Committee on 18 January, 2024
Author: C.Saravanan
Bench: C.Saravanan
W.P.No.8123 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on 18.07.2023
Pronounced on 18.01.2024
CORAM
THE HONOURABLE MR.JUSTICE C.SARAVANAN
W.P.No.8123 of 2020
and
W.M.P.Nos.9645 and 9647 of 2020
Shree Vijayalakshmi Charitable Trust,
(Represented by its Managing Trustee, A.Senthil Kumar)... Petitioner
Vs
1. The Designated Committee,
Office of the Principal Commissioner of GST & Central Excise,
6/7 ATD Street,
Race Course Road,
Coimbatore – 641 018.
2. The Commissioner of Central Excise and Service Tax,
6/7, A.T.D. Street, Race Course Road,
Coimbatore – 641 018.
3. Union of India,
Represented by its Secretary,
Ministry of Finance,
Department of Revenue,
North Block, New Delhi – 110 001. ... Respondents
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W.P.No.8123 of 2020
Prayer: Petition filed under Article 226 of the Constitution of India to issue a
Writ of Certiorarified Mandamus to call for the records pertaining to Form
SVLDRS-3 bearing reference L290220SV301317 dated 29.02.2020 issued
by the first respondent, quash the same and direct the first respondent to
adjust the moneys paid after deducting the waived amount from the total tax
due as provided for under Section 124(2) of the Scheme.
For Petitioner : Mr.K.Sankaranarayanan
For Respondents : Mr.A.P.Srinivas,
learned Senior Standing Counsel
ORDER
I have considered the arguments advanced by the learned counsel for the petitioner and the learned Senior Standing Counsel for the respondents.
2. In this writ petition the petitioner has challenged the Impugned Order dated 29.02.2020 of the first respondent viz., the Designated Authority under the provisions of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 as announced in Chapter V of the Finance (No.2) Act, 2019. 2/16 https://www.mhc.tn.gov.in/judis W.P.No.8123 of 2020
3. In the impugned communication in Form SVLDRS-3 dated 29.02.2020, the tax relief has been stated as Rs.4,85,63,483/-. Thus, the amount payable by the petitioner has been determined as Rs.7,23,47,343/-.
4. The facts are not in dispute. A short point that arises for consideration in this writ petition is whether 50% of the amount which was paid by the petitioner under the Provisions of the Service Tax Voluntary Compliance Encouragement Scheme, 2013 is to be set off against the amounts due as payable by the petitioner under the provisions of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
5. The petitioner had earlier attempted to settle the dispute with the Service Tax Department under the provisions of the Service Tax Voluntary Compliance Encouragement Scheme, 2013 under Chapter VI of the Finance Act, 2013.
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6. Under the aforesaid Scheme 50% of the admitted tax was to be paid along with the application and the balance was to be paid on or before 30th June 2014.
7. The petitioner had declared total tax due on the activity undertaken by the petitioner under the Service Tax Voluntary Compliance Encouragement Scheme, 2013, however, had failed to pay the balance 50% of the admitted tax on or before 30th June 2014.
8. The petitioner partly complied with the requirements of the scheme by depositing a sum of Rs.13,15,41,380/- being 50% of the admitted tax liability. Since the petitioner failed to pay the balance 50% of tax of Rs.13,15,41,380/-, the petitioner was not entitled to the benefit of the aforesaid Scheme.
9. Under these circumstances, a Recovery Notice was issued under Section 110 of the Finance Act, 2013. This was subject matter of a Writ proceedings before this Court in W.P.No.34005 of 2014. W.P.No.34005 of 4/16 https://www.mhc.tn.gov.in/judis W.P.No.8123 of 2020 2014 was dismissed by this Court vide order dated 25.10.2018. Aggrieved by the aforesaid order, the petitioner had filed Writ Appeal in W.A.No.672 of 2019.
10. The Hon’ble Division Bench also dismissed W.A.No.672 of 2019 filed by the petitioner vide its order dated 15.03.2019. An appeal against order dated 15.03.2019 in W.A.No.672 of 2019 is said to be pending on the date of hearing before the Hon’ble Supreme Court in S.L.P.No.11762 of 2019.
11. After the Parliament had announced the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 under Chapter VI of the Finance Act, 2013, the petitioner opted to settle the dispute by filing Form SVLDRS-1 on 31.12.2019. In SVLDRS-1 filed on 31.12.2019, the petitioner admitted the tax liability of Rs.26,30,82,760/-. The respondent admitted the application in Form SVLDRS-2 on 07.02.2020 and estimated an amount of Rs.7,89,24,829/- as the tax due of the petitioner. 5/16 https://www.mhc.tn.gov.in/judis W.P.No.8123 of 2020
12. Form SVLDRS-2 admits pre-deposit of Rs.13,15,41,380/- made by the petitioner against the total tax liability of Rs.26,30,82,760/-.
13. Form SVLDRS-2 dated 07.02.2020 admits the tax relief to the petitioner as Rs.5,26,16,552/- and after adjusting Rs.13,15,41,380/- and estimates a sum of Rs.7,89,24,829/- as the amount payable by the petitioner.
14. Form SVLDRS-3 dated 29.02.2020 admits the tax relief to the petitioner as Rs.4,85,63,438. As per Form SVLDRS-3 dated 29.02.2020, the amount payable by the petitioner is Rs.7,23,47,343.00.
15. Tax due, Tax relief and the amount payable as per Form SVLDRS- 2 and SVLDRS-3 are as under:-
Name Tax Dues Tax Relief Pre-Deposit/any Estimated Amount other deposit of payable duty Form Renting of Rs.5,26,16,552.00 Rs.13,15,41,380.00 Rs.7,89,24,829.00* SVLDRS-2 immovable Rs.26,30,82,760.00 property service – 00440406 Form Renting of Rs.26,30,82,760.00 Rs.4,85,63,438 Rs.14,21,71,979.00 Rs.7,23,47,343.00 SVLDRS-3 immovable property service – 00440406 *Estimated 6/16 https://www.mhc.tn.gov.in/judis W.P.No.8123 of 2020
16. In the affidavit filed in support of the present writ petition, the petitioner has estimated the amount payable by him and the amount estimated by the 1st respondent as detailed below. In so far as the estimate of 1st respondent is concerned there are few arithmetical corrections.
Computation of amount under the Scheme by the petitioner and respondent is as under :-
Particulars Petitioner’s Estimate 1st Respondent’s Estimate Tax Demand A Rs.26,30,82,760/- P Rs.26,30,82,760/- Pre-Deposit B Rs.13,15,41,380/- Q Rs.13,15,41,380/- Balance Tax Payable C=A-B Rs.13,15,41,380/- R=P-Q Rs.13,15,41,380/- Tax Collected until D Rs.1,01,32,781/- S Rs.1,06,30,596/- filing declaration Tax payable under E=60% of Rs.15,78,49,656/- T =60% of R+S- Rs.7,23,47,343/-
Scheme Rs.26,30,82,760/-
Tax collected after filing F Rs.17,75,726/- U Rs.12,77,911/-
declaration
G Rs.14,34,49,887/- V Rs.14,21,71,976/-
Net Payable H=E-G Rs.1,43,99,769/- W=T Rs.7,23,47,343/-
17. In the the counter affidavit filed by the Respondents the calculations of the amount arrived by the respondents in form SVLDRS-3 and the amount arrived by the peitioner is compared in a table which is extracted below:-
Sl. Particulars Amount to be paid Amount to be paid No as per Declarant as per Dept. 1 Tax due from the declarant Rs.26,30,82,760 Rs.13,15,41,380 7/16 https://www.mhc.tn.gov.in/judis W.P.No.8123 of 2020 Sl. Particulars Amount to be paid Amount to be paid No as per Declarant as per Dept. (out of Rs.26,30,82,760, Rs.13,15,41,380 was paid under VCES on 30.12.2013) 2 Amount paid before 31.12.2019 (date Rs.13,15,41,380 Rs.1,01,32,784 of filing the declaration ) ( Recovered through attachment of property) 3 Amount payable after relief under Rs.2,63,08,276 Rs.7,28,45,158 SVLDRS (40%) (60% of Rs.13,15,41,380 -
Rs.1,01,32,784 ) 5 Amount paid Rs.1,19,08,507 Rs.4,97,815 (Amount paid after 31.12.2019) 5 Balance amount payable (3-4) Rs.1,43,99,769 Rs.7,23,47,343
18. The amount of “tax due” of the petitioner on the date when the petitioner opted to settle the dispute earlier under the Service Tax Voluntary Compliance Encouragement Scheme, 2013 was Rs.26,30,82,760/-. Both the petitioner and respondent are in agreement on this aspect.
19. Since the amount of tax due was more than Rs.50,00,000/-, the petitioner was entitled for a relief equivalent to 40% of the tax due in terms of Section 124(1)(c)(ii) of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
20. Thus, the relief that was available to the petitioner will be 8/16 https://www.mhc.tn.gov.in/judis W.P.No.8123 of 2020 Rs.10,52,33,104/- being 40% of Rs.26,30,82,760/-. Thus, the balance payable by the petitioner under the Scheme is Rs.15,78,49,656/-
(Rs.26,30,82,760 – Rs.10,52,33,104).
21. As per Sub section (2) to Section 124 of the Sabka Vishwas (Legacy Dispute Resolution Scheme), 2019, the relief calculated under Sub section (1) shall be subject to the condition that any amount paid as pre deposit at any stage of appellate proceeding under the indirect tax enactment or as deposit during enquiry, investigation or audit, shall be deducted when issuing the statement indicating the amount payable by the declarant.
22. Section 124(2) of the Chapter-V of the Finance Act, 2019 under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 reads as under:-
“124(2) The relief calculated under sub-section (1) shall be subject to the condition that any amount paid as predeposit at any stage of appellate proceedings under the indirect tax enactment or as deposit during enquiry, investigation or audit, shall be deducted when issuing the statement indicating the amount payable by the declarant:
Provided that if the amount of predeposit or deposit 9/16 https://www.mhc.tn.gov.in/judis W.P.No.8123 of 2020 already paid by the declarant exceeds the amount payable by the declarant, as indicated in the statement issued by the designated committee, the declarant shall not be entitled to any refund.”
23. The petitioner has deposited a sum of Rs.1,06,30,596/- [Rs.1,01,32,784 (before filing declaration) + Rs.4,97,815 (after filing declaration)] over and above Rs.13,15,41,380/- being 50% of the admitted tax liability under Service Tax Voluntary Compliance Encouragement Scheme, 2013.This is also admitted by the respondents. The petitioner has also deposited Rs.12,77,911/- on various dates after filing of declaration which has not been taken into consideration in the impugned communication in Form SVLDRS-3 dated 29.02.2020 as detailed below :-
Sl.No CHQ/DD.No Date Amount in Rs.
1 10477 24.01.2020 5,45,389/-
2 23064 27.01.2020 2,34,707/-
3 17164 04.02.2020 1,55,815/-
4 78585 13.02.2020 3,42,000/-
5 Total Rs.12,77,911/-
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W.P.No.8123 of 2020
24. Thus, in all the peittioner has deposited an amount of
Rs.14,34,49,887/- (Rs.13,15,41,380.00 + Rs.1,06,30,596 + Rs.12,77,911/-) which is to be deducted under Section 124(2) of the Chapter-V of the Finance Act, 2019 of the Sabka Vishwas (Legacy Dispute Resolution Scheme), 2019.
25. Thus, the amount to be paid by the petitioner under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 after deduction under Section 124(2) of the Chapter-V of the Finance Act, 2019 of the Sabka Vishwas (Legacy Dispute Resolution Scheme), 2019 is only Rs.1,43,99,769/- (Rs.15,78,49,656 – Rs.14,34,49,887/-) and not Rs.7,23,47,343/- as quantified vide impugned Communication in Form SVLDRS-3 dated 29.02.2020. The calculation of the tax relief of Rs.4,85,63,458/- only by the respondent in Form SVLDRS-3 dated 29.02.2020 is not correct.
26. Following Table will explain the amount payable by the petitioner under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019:-
Sl.No Particulars Amount Amount 11/16 https://www.mhc.tn.gov.in/judis W.P.No.8123 of 2020 A Amount amount of Tax due Rs.26,30,82,760/- B Relief available to the Rs.10,52,33,104/- petitioner under Section 124(1)(C)(ii) of SVLDRS* Scheme, 2019 i.e 40% of Rs.26,30,82,760/- C Amount of Tax Payable by Rs.15,78,49,656/- Rs.15,78,49,656/- the petitioner Due i.e 60% of Rs.26,30,82,760/-
(i) Pre Deposit under STVCE # Rs.13,15,41,380/- Scheme,2013
(ii) Amount paid before Rs.1,01,32,784/-
31.12.2019 (before filing
declaration)
(iii) Amount paid after Rs.4,97,815/-
31.12.2019 (after filing
declaration)
Rs.12,77,911
TOTAL Rs.14,34,49,887/-
D Amount Deductible under Rs.14,34,49,887/-
Section 124(2) of SVLDRS*
Scheme, 2019
E Amount payable Rs.1,43,99,769/-
(C-D)
Note: *Sabha Vishwas (Legacy Dispute Resolution) # Service Tax Voluntary Compliance Encouragement Scheme,2013 12/16 https://www.mhc.tn.gov.in/judis W.P.No.8123 of 2020
27. Since, the petitioner is required to pay only a sum of Rs.1,43,99,769/- under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and since the calculation in impugned Communication in Form SVLDRS-3 dated 29.02.2020 is erroneous, the Impugned Order is therefore liable to be set aside and the case is remitted back to the first respondent or such other officer designated who has been given the power to accept the declarations under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 after the expiry of the aforesaid scheme for issuing necessary forms to bring a closure.
28. Therefore, the petitioner is directed to pay a sum of Rs.1,43,99,769/- togehter with interest at 12% on the aforesaid amount of Rs.1,43,99,769/- calculated from 29.03.2020 within a period of six (6) weeks from the date of receipt of a copy of this order.
29. Subject to the petitioner paying the aforesaid amount of Rs.1,43,99,769/- and interest , the declaration filed by the petitioner under Chapter V of the Finance Act, 2019 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 shall be accepted. 13/16 https://www.mhc.tn.gov.in/judis W.P.No.8123 of 2020
30. The writ petition stands allowed with the above observations and directions. No cost. Consequently, connected miscellaneous petitions are closed.
18.01.2024 Neutral Citation: Yes/No Internet: Yes/No Speaking/Non-speaking Order rgm 14/16 https://www.mhc.tn.gov.in/judis W.P.No.8123 of 2020 To
1. The Designated Committee, Office of the Principal Commissioner of GST & Central Excise, 6/7 ATD Street, Race Course Road, Coimbatore – 641 018.
2. The Commissioner of Central Excise and Service Tax, 6/7, A.T.D. Street, Race Course Road, Coimbatore – 641 018.
3. Union of India, Represented by its Secretary, Ministry of Finance, Department of Revenue, North Block, New Delhi – 110 001.
15/16 https://www.mhc.tn.gov.in/judis W.P.No.8123 of 2020 C.SARAVANAN, J.
rgm W.P.No.8123 of 2020 and W.M.P.Nos.9645 and 9647 of 2020 18.01.2024 16/16 https://www.mhc.tn.gov.in/judis