This petition raises the issue of eligibility under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) in cases where tax liability was admitted before the stipulated cut-off date (June 30, 2019), but the show-cause notice quantifying the demand was issued afterward. The key points of the petition are summarized as follows:

1. Background: The petitioner is a registered service provider under the Finance Act, 1994, engaged in "Outdoor Catering Services and Manpower Supply Services."
2. Investigation: During an investigation in April 2018, the petitioner admitted a service tax liability of ₹1,39,58,752 for the period 2014-2017 in a statement recorded on April 16, 2019, and paid ₹20,08,662 for the year 2013-2014.
3. SVLDRS Application: The petitioner applied for the scheme, disclosing an amount of ₹1,50,37,871 as a precautionary measure, based on the show-cause notice issued on October 16, 2019.
4. Rejection of Application: The authorities rejected the petitioner's application under the SVLDRS, stating that quantification of liability occurred after the cut-off date of June 30, 2019.

Arguments:

• Petitioner’s Stand:

  • Quantification of the admitted liability occurred during the investigation on April 16, 2019, which is before the cut-off date, meeting the eligibility requirements.
  • The mention of a higher amount in the application was an act of caution, and no prejudice was caused to the authorities since the liability had been admitted earlier.
  • Reliance was placed on clarifications by the Ministry of Finance (dated August 27, 2019) and precedents from various High Courts where similar facts warranted eligibility under the scheme.

• Respondent’s Stand:

  • The quantification in the SVLDRS application was based on the show-cause notice issued after the cut-off date, making the petitioner ineligible under Section 125(1)(e) of the scheme.

Court’s Analysis:

1. Definition of "Quantified":

   • As per Section 121(r), "quantified" means any written communication of the amount of duty payable. The statute does not specify that quantification must be conducted by the authorities.
   • An admitted liability communicated during an investigation qualifies as "quantified."

2. Precedent and Clarifications:

   • High Court decisions and the Ministry’s clarifications emphasize that admission of liability by an assessee before June 30, 2019, suffices for eligibility.
   • The purpose of the scheme is to reduce litigation and encourage settlement, which aligns with accepting the petitioner’s earlier quantification.

3. Impact of Higher Declaration:

   • Declaring a higher amount in the application does not affect eligibility if it was done in good faith, particularly when the petitioner does not seek any refund or adjustments.

Judgment:

• The petitioner’s liability was quantified during the investigation on April 16, 2019, prior to the cut-off date. Consequently, the rejection of the application under SVLDRS was deemed unjustified.
• The authorities were directed to process the petitioner’s application under the scheme, granting them the benefit of the reduced litigation scheme.