Karnataka High Court
M/S Lm Wind Power Blades India Pvt Ltd vs Designated Committee on 20 October, 2022
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 20TH DAY OF OCTOBER, 2022
BEFORE
THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION NO.21844/2021 (T - RES)
BETWEEN:
M/S. NIKITHA BUILDTECH (P) LTD.,
#602, 6TH FLOOR, BRIGADE RUBIX,
NO.20, HMT CAMPUS ROAD,
YESHWANTHPUR,
BENGALURU - 560 022.
RERPRESENTED BY ITS
MANAGING DIRECTOR,
SHRI. ASHOK R KULKARNI.
... PETITIONER
(BY SRI.DESHPANDE ASHOK ARVIND RAO, ADVOCATE)
AND:
1. UNION OF INDIA,
REPRESENTED BY UNION SECRETARY,
DEPARTMENT OF REVENUE,
MINISTRY OF FINANCE,
NEW DELHI - 110 001.
2. THE COMMISSIONER OF CENTRAL TAX,
BENGALURU NORTH WEST
GST COMMISSIONERATE,
2ND FLOOR, SOUTH WING, BMTC COMPLEX,
SHIVAJINAGAR,
BENGALURU - 560 051.
3. DESIGNATED COMMITTEE UNDER
SABKA VISHWAS (LEGACY DISPUTE RESOLUTION)
SCHEME, 2019,
THE JOINT COMMISSIONER
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CENTRAL TAX,
2ND FLOOR, SOUTH WING,
BMTC COMPLEX, SHIVAJINAGAR,
BENGALURU - 560 051.
4. THE ASSISTANT COMMISSIONER OF
CENTRAL TAX,
DESIGNATED COMMITTEE UNDER
SABKA VISHWAS (LEGACY DISPUTE
RESOLUTION) SCHEME, 2019,
2ND FLOOR, SOUTH WING,
BMTC COMPLEX, SHIVAJINAGAR,
BENGALURU - 560 051.
5. THE JOINT COMMISSIOENR OF CENTRAL TAX,
BENGALURU NORTH WEST
GST COMMISSIONERATE,
2ND FLOOR, SOUTH WING,
BMTC COMPLEX, SHIVAJINAGAR,
BENGALURU - 560 051.
6. THE ASSISTANT COMMISSIONER OF
CENTRAL TAX, NWD-5, 67/2,
SGR COMPLEX, SADASHIVANAGAR,
KUNIGAL ROAD,
TUMKUR - 572 102.
... RESPONDENTS
(BY SRI. AMIT DESHPANDE, ADVOCATE)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO
ISSUE DIRECTION QUASHING THE IMPUGNED ORDER DATED
6.05.2020 PASSED BY THE R4 VIDE ANNEXURE - N AND HOLD
THAT THE PETITIONER IS ELIGIBLE FOR THE BENEFIT
UNDER THE SCHEME AND ETC.
THIS WRIT PETITION COMING ON FOR ORDERS, THIS
DAY, THE COURT MADE THE FOLLOWING:
ORDER
In this petition, the petitioner has sought for the following reliefs;
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"A. Issue an appropriate writ, order or a direction in the nature of a writ of Certiorari quashing the Impugned Order bearing C.No.IV/16/833/2019 Adjn BNW, dt.06.05.2020 passed by the Respondent No.4 vide Annexure-N and hold that the Petitioner is eligible for the benefit under the Scheme.
B. Issue an appropriate writ, order or a direction in the nature of a writ of Certiorari quashing the Order-in- Original No.30/2020-Adj., dt. 5.03.2021 passed by the Respondent No.6 vide Annexure-R and hold it to be illegal and against the intent or spirit of the Scheme.
C. Issue a writ of Mandamus, or such other writ, order or direction, as this Hon'ble Court may deem fit and proper, directing the department to drop the Show Cause Notice bearing Sl.No.19/2019-20-JC, dt.07.01.2020 of the Joint Commissioner of Central Tax, Bengaluru North West vide Annexure-F."
2. Heard learned counsel appearing for the petitioner and learned counsel appearing for the respondents and perused the material on record.
3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel appearing for the petitioner submits that pursuant to introduction of the 'Sabka Vishwas (Legacy -4- Dispute Resolution) Scheme, 2019' (for short 'the SVLDR Scheme'), the petitioner submitted a declaration dated 28.12.2019 seeking benefit of waiver of a sum of Rs.53,88,248/- in terms of the SVLDR Scheme. It is submitted that on 21.06.2019 itself, the petitioner had admitted and quantified the service tax payable by him of a sum of Rs.50,50,277/- and the same was done prior to 30.06.2019 as per the Scheme.
4. It is the grievance of the petitioner that despite the petitioner submitting Form SVLDRS-1 on 28.12.2019, the respondents issued a Show Cause Notice dated 07.01.2020 followed by a Notice in Form SVLDRS-2 dated 23.01.2020 to which, petitioner submitted a reply in Form SVLDRS-2A on 04.02.2020 and also submitted a letter dated 05.02.2020 to the respondents. It is further contended that on 28.02.2020, the respondents issued a Show Cause Notice which was replied by the petitioner on 20.03.2020. It is contended that despite the aforesaid facts and circumstances and the petitioner admitting and quantifying the service tax payable by him prior to the cut of date i.e., 30.06.2019 and making a -5- request for availing the benefit under the SVLDR Scheme prior to the cut of date, the respondents have proceeded to pass the impugned order at Annexure-N dated 06.05.2020 rejecting the claim of the petitioner for the benefit under the SVLDR Scheme on the ground that the amount payable by the petitioner had not stood quantified as on 30.06.2019 and consequently, in view of the Board Circular issued by the respondents as can be seen from Annexure-N, the petitioner was not entitled to the benefit of the said Scheme. Having rejected the claim of the petitioner, the respondents have proceeded to pass an order on 05.03.2021, which is also assailed in the present petition.
5. In support of his contention, learned counsel appearing for the petitioner invites my attention to the order of this Court in the case of M/s. Bioneeds India (P) Ltd. Vs. The Commissionerof Central Tax & Others passed in W.P.No.15497/2021 dated 26.08.2022 in order to contend that this Court has come to categorical conclusion that the benefit under the SVLDR Scheme would be applicable even when an enquiry or investigation or audit is pending against the -6- Assessee so long as there is an admission and quantification of the amount payable by the petitioner prior to 30.06.2019. It is therefore submitted that the impugned orders at Annexure- N and R deserve to be quashed.
6. Per contra, learned counsel appearing for the respondents, in addition to reiterating the various contentions urged in the statement of objections submits that the respondents were fully justified in passing the impugned orders and the same do not warrant interference by this Court in the present petition. It is also submitted that while the petitioner had admitted and quantified that he was liable to pay service tax in a sum of Rs.50,50,277/- as can be seen from Annexure-A, the petitioner had sought for waiver of a sum of Rs.53,00,000/- as can be seen from Form SVLDRS-1 submitted by him and consequently, since there is variance between the admitted/quantified amount by the petitioner and the amount mentioned in Form SVLDRS-1, the Scheme would not be applicable insofar as the petitioner is concerned. It is also submitted that the order in original has already been passed and consequently, it is impermissible to invoke the -7- jurisdiction of this Court under Article 226 of the Constitution of India when there was no interim order and the same was not stayed by any Authority including this Court. It is therefore submitted that there is no merit in the petition and the same is liable to be dismissed.
7. I have given my anxious consideration to the rival submissions and perused the material on record.
8. The undisputed material on record indicates that on 21.06.2019 i.e., prior to the cut of date 30.06.2019, the petitioner had admitted and quantified the service tax payable by him as Rs.50,50,277/-.
9. Under identical circumstances, in M/s. Bioneeds India's case (Supra), this Court held as under;
"In this petition, petitioner has sought for the following reliefs:
a. Quash the impugned order passed by the Designated Committee by way of letter C No.IV/16/854/2019 Adjn BNW/6593/2020 dated 08.05.2020 vide Annexure - A. b. Issue writ of mandamus or direction or any other appropriate writ directing the -8- respondents to extend the benefit under the SVLDRS, 2019 based on the service tax liability quantified, admitted and already paid by the petitioner.
c. Grant such other writ, order or direction as deemed fit in the facts and circumstances of the case in the interest of justice and equity.
2. Heard learned Senior counsel for the petitioner and learned counsel for the respondents -
revenue and perused the material on record.
3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned Senior counsel for the petitioner submits that pursuant to the introduction of the 'Sabka Vishwas (Legacy Dispute Resolution"
Scheme, 2019 (for short ' the SVLDR scheme'), the petitioner submitted a declaration dated 28.12.2019 seeking benefit of waiver under the said SVLDR Scheme. After providing an opportunity of personal hearing to the petitioner, on 05.02.2020, the respondent proceeded to pass the impugned order / letter dated 08.05.2020 rejecting the application of the petitioner under SVLDR scheme, aggrieved by which, petitioner is before this Court by way of the present petition.-9-
4. Per contra, learned counsel for the respondents - revenue submits that there is no merit in the petition and that the same is liable to be dismissed.
5. The material on record discloses that a perusal of the impugned order / letter will indicate that the sole ground on which the application of the petitioner for grant of benefit under the SVLDR Scheme, was that the investigation initiated against the petitioner was not completed as on 30.06.2019 and consequently, petitioner was not eligible under the SVLDR Scheme. In this context, it is relevant to state that as can be seen from the Notification dated 27.08.2019 issued by the Central Board of Indirect Taxes and Customs in relation to the SVLDR scheme, respondents have clarified that at clause 10(g) of the said Circular that cases under an enquiry, investigation or audit where the duty demand has been quantified on or before 30.06.2019 would be eligible under the SVLDR scheme. The said clause 10(g) of the Circular is extracted as hereunder:-
"10. Further, the following issues are clarified in the context of the various provisions of the Finance (No.2) Act, 2019 and Rules made thereunder:
(g) Cases under an enquiry, investigation or audit where the duty demand has been quantified on or before the 30th day of June, 2019 are eligible under the Scheme. Section 2(r)
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defines "quantified" as a written communication of the amount of duty payable under the indirect tax enactment. It is clarified that such written communication will include a letter intimating duty demand; or duty liability admitted by the person during enquiry, investigation or audit; or audit report etc".
6. As can be seen from the aforesaid Circular that any duty / liability admitted by a person during enquiry, investigation, audit / audit report etc., and any admission in this regard has to be treated and construed as "quantification" for the purpose of Section 123(c) of the SVLDR scheme. In this regard, a perusal of the answer given by the petitioner to question No.7 in the statement recorded by the respondents (Annexure-E dated 12.01.2018) will clearly indicate that there is an admission on the part of the petitioner with regard to total sales service tax liability and this admission is what is sought to be brought under and availed benefit of by the petitioner in his application under the SVLDR scheme. Under these circumstances, I am of the considered opinion that in view of clause 10(g) of the aforesaid Circular dated 27.08.2019 coupled with Section 123(c) of the SVLDR Scheme, the admission made by the petitioner during the course of investigation on 12.01.2018 clearly amounts to quantification prior to 30.06.2019 for the purpose of availing the benefit of the SVLDR scheme and consequently, merely
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because the investigation had not been completed before 30.06.2019, the said circumstance cannot be made the basis to come to the conclusion that the petitioner was not entitled to the benefit of the SVLDR scheme and as such, the impugned order / letter deserves to be quashed.
7. A perusal of Section 123 of the SVLDR Scheme will clearly indicate that the scheme was applicable even when an enquiry or investigation or audit is pending against the petitioner - assessee on or before 30.06.2019. in the instant case, it is an undisputed fact that the enquiry / investigation against the petitioner was pending as on 30.06.2019 even according to the respondents as can be seen from the impugned order / letter and consequently, on this ground also, the impugned letter / order deserves to be quashed and the mater remitted back to the respondents for reconsideration afresh and in accordance with law.
8. In the result, I pass the following:-
ORDER
(i) Petition is hereby allowed.
(ii) The impugned letter / communication / order at Annexure - A dated 08.05.2020 is hereby set aside.
(iii) The matter is remitted back to the respondents for reconsideration of the claim of the petitioner afresh bearing in mind the observations
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made in this order as well as the SVLDR Scheme and the circular dated 27.08.2019 in accordance with law."
10. As can be seen from the aforesaid judgment, this Court has come to the conclusion that notwithstanding pendency of an enquiry or investigation or audit on or before and as on 30.06.2019, so long as the petitioner had admitted and quantified the service tax payable by him prior to 30.06.2019, the petitioner- Assessee would be entitled to the benefit of the SVLDRS Scheme and consequently, this Court set aside the order impugned therein rejecting the claim of the petitioner- Assessee therein for the benefit of SVLDRS Scheme.
11. Under these circumstances, in view of the order passed by this Court in M/s. Bioneeds's case, which was rendered under identical circumstances, I am of the considered opinion that the impugned order/communication dated 06.05.2020 passed by the respondents deserves to be quashed by declaring and holding that the petitioner having admitted and quantified that he is liable to pay the service tax prior to 30.06.2019, which was the cut off date, petitioner would be entitled to the benefit of the SVLDRS Scheme. In
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this context, it is also relevant to state that the petitioner has paid the entire sum of Rs.50,50,277/- to the respondents on 27.06.2019, 22.07.2019 and 29.07.2019 in three installments.
12. Under these circumstances, since the petitioner has already made payment of the amount in respect of which, he had claimed the benefit under the SVLDRS scheme much prior to submitting Form SVLDRS-1, I am of the view that the petitioner would be entitled to avail the benefit under the SVLDRS Scheme and rejection of the same by the respondents by issuing the impugned communication is clearly arbitrary, illegal and contrary to law as well as the provisions of the said Scheme and the same deserves to be quashed.
13. Insofar as the contention of the respondents that while the admission and quantification of the petitioner is only in respect of Rs.50,50,277/-, there is a discrepancy with regard to the amount quantified under the SVLDRS Scheme which is 53,88,248/-, which disentitles him from claiming the benefit under the said Scheme is concerned, it is significant to note that as against the admitted fact quantifying liability of
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Rs.50,50,277/- and in terms of the said Scheme, the petitioner would be entitled to waiver of 50% of the said sum of Rs.53,88,248/-, which would come to 53,88,248/2 = Rs.26,94,124/-.
14. Under these circumstances, since the petitioner would be entitled to waiver of 50% of the sum of Rs.53,88,248/- is Rs.26,94,124/-, the sum of Rs.50,50,277/- which is already admitted/quantified and paid by him would be far in excess of the said 50% is Rs.26,94,124/-. Contention of the respondents that the petitioner would not be entitled to the benefit of the Scheme in view of discrepancy between the admitted/quantified amount and the amount shown in Form SVLDRS-1 cannot be accepted.
15. Insofar as the contention of the respondents that the order in original was not stayed by any Forum or Authority and that it was not a fit case for invoking the writ jurisdiction of this Court under Article 226 of the Constitution of India is concerned, it is relevant to state that the impugned order in original dated 05.03.2021 was passed by respondent No.6 only after issuing the impugned order/letter dated 06.05.2020
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holding that the petitioner is not entitled to the benefit under the SVLDRS Scheme and consequently, merely because the order was not stayed, the said circumstance cannot be made the basis to hold that the present petition was not maintainable before this Court, particularly, when the impugned order-in- original dated 05.03.2021 was passed during the pendency of W.P.No.8051/2021 before this Court.
16. Insofar as the contention urged by learned counsel appearing for the respondents that the present petition is barred by res-judicata in view of disposal of W.P.No.8051/2021 vide final order dated 25.08.2021 is concerned, it is necessary to state that the said petition was filed by the petitioner challenging the impugned order dated 06.05.2020 and not the order in original dated 05.03.2021. It so transpired that during the pendency of the aforesaid petition, in which, challenge was restricted and limited to the order dated 06.05.2020, since there was no interim protection/order in favour of the petitioner, the respondents proceeded to pass the order in original dated 05.03.2021. Under these circumstances, this Court noticed that the order
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in original has already been passed during the pendency of the said petition and disposed off the same as having become infructuous reserving liberty in favour of the petitioner.
17. It is needless to state that in order to attract bar of res-judicata, there should be determination of issues finally by the Court or Tribunal or the Authority and in the absence of determination of any issue or question that arose between the parties, in W.P.No.8051/2021 the bar of res-judicata would not be attracted. Further in the light of the undisputed fact that there was no determination of any issue or question in the earlier round of litigation in W.P.No.8051/2021, which was restricted and limited only to the order dated 08.05.2020 and not in respect of the order in original dated 05.03.2021, question of present petition being barred by res-judicata is totally misconceived and untenable and the same is liable to be rejected.
18. In the result, I pass the following:
ORDER
(i) Petition is allowed.
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(ii) The impugned order bearing C.No.IV/16/833/2019 Adjn BNW, dated 06.05.2020 at Annexure-A passed by respondent No.4 and the order in original No.30/2020-Adj dated 05.03.2021 at Annexure- R passed by respondent No.6 are hereby quashed.
(iii) Matter is remitted back to the respondents for reconsideration of the claim of the petitioner bearing in mind the Circulars dated 27.08.2019 and 12.12.2019 and the observations made in this order in accordance with law.
Sd/-
JUDGE PN