Gujarat High Court
Bhupeshkumar Jagdishchandra Shah vs Union Of India on 11 December, 2024
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/1471/2022 JUDGMENT DATED: 11/12/2024
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 1471 of 2022
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE D.N.RAY
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Approved for Reporting Yes No
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BHUPESHKUMAR JAGDISHCHANDRA SHAH
Versus
UNION OF INDIA & ORS.
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Appearance:
MR SANKET GUPTA FOR MR ANAND NAINAWATI(5970) for the
Petitioner(s) No. 1
MS HETVI H SANCHETI(5618) for the Respondent(s) No. 3,4
NOTICE SERVED for the Respondent(s) No. 1,2
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE D.N.RAY
Date : 11/12/2024
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Heard learned advocate Mr. Sanket Gupta for learned advocate Mr. Anand Nainawati for the petitioner and learned advocate Page 1 of 13 Uploaded by RAGHUNATH R NAIR(HC00196) on Fri Dec 20 2024 Downloaded on : Fri Dec 20 22:50:43 IST 2024 NEUTRAL CITATION C/SCA/1471/2022 JUDGMENT DATED: 11/12/2024 undefined Ms. Hetvi H. Sancheti for the respondent nos. 3 and 4. Though served, no one appeared for respondent nos. 1 and 2.
2. Having regard to the controversy involved in this matter, which is in a narrow compass, with the consent of the learned advocates for the respective parties, the matter is taken up for hearing.
3. Rule returnable forthwith. Learned advocate Mr. Hetvi H. Sancheti waives service of notice of rule on behalf of respondent nos. 2 and 3.
4. By this petition under Article 226 of the Constitution of India, the petitioner has prayed for the following prayers:
"(a) that this Hon'ble Court be pleased to issue a Writ in the nature of Mandamus or any other writ, order or direction under Article 226 of the Constitution of India calling for the records pertaining to the Petitioner's case and after going into the validity and legality thereof, direct the Respondent No. 2 to accept Rs. 30,36,101/- as a pre-deposit amount and issue fresh SVLDRS 3 to the Petitioner and allow them to pay the amount Page 2 of 13 Uploaded by RAGHUNATH R NAIR(HC00196) on Fri Dec 20 2024 Downloaded on : Fri Dec 20 22:50:43 IST 2024 NEUTRAL CITATION C/SCA/1471/2022 JUDGMENT DATED: 11/12/2024 undefined based on the fresh SVLDRS-3, either manually or through the online portal, and subject to such payment, issue a discharge certificate in Form SVLDRS-4 to the Petitioner.
(b) that this Hon'ble Court issue a Writ in the nature of Certiorari or Mandamus or any other writ, order or direction under Article 226 directing respondents and its officer not to initiate any coercive action by way of recovery in respect of OIO No. 26-27/CGST/Ahmd-South/JC/RK/2021 dated 03.08.2021 passed by the Respondent no.4 till the final disposal of the present petition.
(c) for costs of this Petition;
(d) for such further and other reliefs as the nature and circumstances of the case may require."
5. Brief facts of the case are that the petitioner is the proprietor of sole proprietorship firm namely M/s. The Cap A Pie and is engaged in the business of providing services of washing and dry cleaning of cloth/linen to different divisions of Indian Railways, Hotels and Clubs and prior to introduction of the Goods and Service Tax (GST), the petitioner firm was registered with the Service Tax Department.
6. A show cause notice dated 11.01.2016 was issued by DGCEI to show cause as to why an amount of Rs. 1,22,37,824/- Page 3 of 13 Uploaded by RAGHUNATH R NAIR(HC00196) on Fri Dec 20 2024 Downloaded on : Fri Dec 20 22:50:43 IST 2024
NEUTRAL CITATION C/SCA/1471/2022 JUDGMENT DATED: 11/12/2024 undefined should not be demanded and recovered from the firm.
7. Pursuant to such notice, the adjudicating authority passed the order-in-original dated 25.01.2017 confirming the demand of service tax.
8. Being aggrieved by the order-in-original, the petitioner filed the appeal before the appellate authority. The appellate authority remanded the matter back to the adjudicating authority to consider the cum duty benefit as contracts awarded by the Indian Railways prior to 01.07.2012 were inclusive of all taxes.
9. It is the case of the petitioner that the application window for filing a declaration under Sabka Vishwas Scheme was opened on the SVLDRS portal on 01.09.2019 on the website of the Central Board of Indirect Taxes and Customs.
10. The petitioner therefore, on behalf of M/s. The Cap a Page 4 of 13 Uploaded by RAGHUNATH R NAIR(HC00196) on Fri Dec 20 2024 Downloaded on : Fri Dec 20 22:50:43 IST 2024 NEUTRAL CITATION C/SCA/1471/2022 JUDGMENT DATED: 11/12/2024 undefined Pie, filed a declaration on 30.12.2019 under section 125 of the Finance Act (No.2), 2019 vide online application in Form SVLDRS-1.
11. The petitioner again filed online application on 14.01.2020 in Form SVLDRS-1, as according to the petitioner, they had filed the application wrongly and also addressed a letter to the department on the same day requesting them to withdraw/reject the earlier application and consider the fresh application and process the same.
12. Respondent no.2 issued notice dated 07.02.2020 for personal hearing along with Form SVLDRS-2 stating that the estimated amount payable by the petitioners shall be Rs.56,32,061/-.
13. The petitioner did not agree with the estimated amount as per From SVLDRS-2 and addressed a letter dated 11.02.2020 clarifying that the petitioner has claimed the Page 5 of 13 Uploaded by RAGHUNATH R NAIR(HC00196) on Fri Dec 20 2024 Downloaded on : Fri Dec 20 22:50:43 IST 2024 NEUTRAL CITATION C/SCA/1471/2022 JUDGMENT DATED: 11/12/2024 undefined amount of Rs.30,36,101/- as deposited at the time of investigation against the outstanding liability of Rs.1,22,37,824/- which is reflected in the show cause notice dated 11.01.2016.
14. The petitioner thereafter filed Form SVLDRS-2A on 13.02.2020 disagreeing with the estimated amount calculated by the Designated Committee. The Designated Committee issued Form SVLDRS-2B intimating that the personal hearing has been fixed on 19.02.2020, however, due to ill health the petitioner did not appear and requested for short adjustment.
15. It is the case of the petitioner that without considering the clarification made by the petitioner, the Designated Committee issued Form SVLDRS-3 on 06.03.2020 stating that the amount payable to avail benefit of Sabka Vishwas Scheme shall be Rs.56,32,061/- after considering the pre-deposit amount of Rs.4,86,851/- instead of Rs.30,36,101/-. Page 6 of 13 Uploaded by RAGHUNATH R NAIR(HC00196) on Fri Dec 20 2024 Downloaded on : Fri Dec 20 22:50:43 IST 2024
NEUTRAL CITATION C/SCA/1471/2022 JUDGMENT DATED: 11/12/2024 undefined
16. The petitioner thereafter addressed a letter to the department on 07.06.2021 stating that they are ready to settle the dispute and requested the department to issue fresh SVLDRS-3 after considering the pre-deposit amount at Rs.30,36,101/- followed by reminder letters on 18.06.2021 and 25.06.2021 requesting the respondents to consider SVLDRS application filed by them.
17. Respondent no.2 thereafter issued letter dated 25.06.2021 stating that the request to consider the SVLDRS application cannot be acceded.
18. Respondent no.3 vide impugned order-in-original dated 03.08.2021 confirmed the demand of service tax amounting to Rs.1,22,37,824/- along with interest and penalty and also granted set off of Rs.30,36,101/- deposited by the petitioner while computing the dues payable.
19. Being aggrieved by the impugned order, the petitioner Page 7 of 13 Uploaded by RAGHUNATH R NAIR(HC00196) on Fri Dec 20 2024 Downloaded on : Fri Dec 20 22:50:43 IST 2024 NEUTRAL CITATION C/SCA/1471/2022 JUDGMENT DATED: 11/12/2024 undefined has preferred the petition.
20. Learned advocate Mr. Saket Gupta for the petitioner submitted that the petitioner filed Form SVLDRS-1 on 14.01.2020 showing Category - Litigation, Sub Category - SCN involving duty pending and tax dues less tax relief was computed at Rs. 30,82,811/-
21. It was submitted that it is not in dispute that the appellate authority remanded the matter back to the adjudicating authority to consider the benefit of cum duty and adjudicating authority was required to decide the pending show cause notice.
22. It was pointed out that the Designated Committee has issued Form SVLDRS-2 for computing the amount payable by the petitioner at Rs.56,32,061/- without taking into consideration the amount of Rs.30,36,101/- deposited by the petitioner and instead only the amount of Rs. 4,86,851/- was Page 8 of 13 Uploaded by RAGHUNATH R NAIR(HC00196) on Fri Dec 20 2024 Downloaded on : Fri Dec 20 22:50:43 IST 2024 NEUTRAL CITATION C/SCA/1471/2022 JUDGMENT DATED: 11/12/2024 undefined taken into consideration. It was submitted that the petitioner had explained in the objection letter dated 18.11.2020 stating that at the time of investigation by DGCEI, the petitioner has paid the service tax amounting to Rs.30,36,101/- against the liability of Rs.1,22,37,824/- which can be verified from the record. The petitioner therefore, filed Form SVLDRS-2A. However, the respondent by issuing Form SVLDRS-3 called upon the petitioner to pay the amount of Rs.56,32,061/-.
23. It was therefore, submitted that the Designated Committee was required to take into consideration the amount already deposited by the petitioner and the petitioner was only required to pay the amount of Rs.30,82,811/-. It was submitted that the petitioner is also ready and willing to pay the interest from 01.07.2020 till the date of payment on the said amount.
24. It was further pointed out that inspite of repeated reminders, the Designated Committee has failed to consider the representation made by the petitioner. Reference was also Page 9 of 13 Uploaded by RAGHUNATH R NAIR(HC00196) on Fri Dec 20 2024 Downloaded on : Fri Dec 20 22:50:43 IST 2024 NEUTRAL CITATION C/SCA/1471/2022 JUDGMENT DATED: 11/12/2024 undefined made to the order-in-original dated 03.08.2021 passed by the Adjudicating Authority taking into consideration the amount deposited by the petitioner during the course of investigation by appropriating Rs.30,36,101/- while computing total tax liability. It was therefore, submitted that the Designated Committee was also required to take into consideration the said amount for the purpose of computation of amount payable under the SVLDRS which is a benevolent scheme for the benefit of the tax payers.
25. On the other hand, learned advocate Ms. Hetvi Sancheti for the respondent submitted that the petitioner was supposed to make the payment as per the amount computed by the Designated Committee in Form SVLDRS-3 on or before 30.06.2020 which was the last date to pay the dues as per Rule 7 of the SVLDRS as the time period was already extended due to Covid-19 pandemic upto 30.06.2020.
26. Reliance was placed on the decision of Hon'ble Page 10 of 13 Uploaded by RAGHUNATH R NAIR(HC00196) on Fri Dec 20 2024 Downloaded on : Fri Dec 20 22:50:43 IST 2024 NEUTRAL CITATION C/SCA/1471/2022 JUDGMENT DATED: 11/12/2024 undefined Supreme Court in case of Yashi Constructions v. Union of India reported in 2022 (58) G.S.T.L. 144 (SC) which was followed by this Court in case of Bhupeshkuma Jagdischandra Shah v. Union of India reported in (2023) 12 Centax 322 (Guj) to submit that by permitting the petitioner to deposit the amount of Rs.30,82,811/- with interest would amount to extending the time, resulting into modification of the Scheme which is not permissible. It was submitted that in case of Yashi Constructions (supra), Hon'ble Apex Court held as under:
"It is an admitted fact that the petitioner did not deposit the amount under the Scheme within the time limit provided under the Scheme, i.e., within 30 days. In that view of the matter, the High Court has rightly refused to grant relief to the petitioner for extension of the period to make the deposit under the Scheme. It is a settled proposition of law that a person, who wants to avail the benefit of a particular Scheme has to abide by the terms and conditions of the Scheme scrupulously. If the time is extended not provided under the Scheme, it will tantamount to modifying the Scheme which is the the prerogative of the Government."
27. It was therefore, submitted that no interference is called for as the petitioner has failed to deposit the amount as Page 11 of 13 Uploaded by RAGHUNATH R NAIR(HC00196) on Fri Dec 20 2024 Downloaded on : Fri Dec 20 22:50:43 IST 2024 NEUTRAL CITATION C/SCA/1471/2022 JUDGMENT DATED: 11/12/2024 undefined determined by the Designated Committee under the provisions of the SVLDRS.
28. Having heard the learned advocates for the respective parties and considering the facts of the case, it is not in dispute that the petitioner had deposited the amount of Rs.30,36,101/- pending investigation which is also adjusted in the order-in- original passed by the respondent authority after the scheme was over while determining the tax liability under the provisions of the GST Act. Therefore, the amount of Rs.30,36,101/- ought to have been considered as the amount paid towards the outstanding liability instead of amount of pre- deposit made by the petitioner of Rs.4,86,851/- for preferring the appeal before the Commissioner (Appeals).
29. In such circumstances, there is a glaring mistake committed by the Designated Committee while computing the amount payable under SVLDRS. The petitioner was always ready and willing to deposit the amount of Rs.30,82,811/- after considering the amount of Rs.30,36,101/- deposited by the Page 12 of 13 Uploaded by RAGHUNATH R NAIR(HC00196) on Fri Dec 20 2024 Downloaded on : Fri Dec 20 22:50:43 IST 2024 NEUTRAL CITATION C/SCA/1471/2022 JUDGMENT DATED: 11/12/2024 undefined petitioner. Therefore, by permitting the petitioner to deposit the amount of Rs.30,82,811/- with interest, it cannot be said that the time period for deposit under SVLDRS would be extended as the Designated Committee has committed an error in computation of the amount payable under the provisions of the SVLDRS without taking into consideration the amount already deposited during the investigation by the petitioner.
30. In view of foregoing reasons, the petition succeeds. The petitioner is directed to deposit amount of Rs.30,82,811/- within a period of four weeks from today along with interest at the rate of 9% p.a. from 06.03.2020 till the date of payment.
31. On receipt of payment of such amount, the respondent is directed to issue Form SVLDRS-4 as per the provisions of the SVLDRS in accordance with law. Rule is made absolute to the aforesaid extent. No order as to costs.
(BHARGAV D. KARIA, J) (D.N.RAY,J) RAGHUNATH R NAIR Page 13 of 13 Uploaded by RAGHUNATH R NAIR(HC00196) on Fri Dec 20 2024 Downloaded on : Fri Dec 20 22:50:43 IST 2024