Case Note & Summary
The petitioner, Eka Academy Private Limited, received an email from the GST audit team on 5th April 2019 regarding a service tax mismatch for Financial Years 2014-2015 to 2017-2018, indicating a difference of only Rs.1. Instead of paying the amount, the petitioner conducted an internal audit and discovered a short payment of Rs.22,00,414/-. The petitioner initially filed a declaration under the Sabka Vishwas Legacy Dispute Resolution Scheme (SVLDRS) on 6th November 2019 under the voluntary disclosure category, declaring Rs.16,04,367/-, which was accepted. However, the petitioner did not make the payment and instead filed another declaration on 30th December 2019 under the 'Investigation, Enquiry or Audit' category, declaring the full amount of Rs.22,00,414/-. This declaration was rejected by the respondents on the ground that the tax dues had not been quantified before 30th June 2019, making it ineligible under Section 125(1)(e) read with Section 121(r) of the Finance (No.2) Act, 2019. The petitioner contended that by a letter dated 6th May 2019, it had informed the respondents of the short payment and quantified the amount, and the respondents' email dated 5th August 2019 called for payment of the same amount. The court, relying on its earlier decisions in Thought Blurb v. Union of India and Joseph Daniel Massey v. Union of India, held that the petitioner's letter dated 6th May 2019, admitting the liability of Rs.22,00,414/-, and the Department's email dated 5th August 2019, constituted quantification before the cut-off date. The court distinguished the cases cited by the respondents, Chaque Jour HR Services Pvt. Ltd. and JSW Steel Limited, noting that in those cases there was no admission or quantification. The court allowed the writ petition, quashed the rejection order, and directed the respondents to process the petitioner's declaration under the investigation category and grant consequential relief.
Headnote
A) Indirect Tax - SVLDRS - Quantification of Tax Dues - Section 121(r) read with Section 125(1)(e) of Finance (No.2) Act, 2019 - The issue was whether the petitioner's tax dues were quantified before the cut-off date of 30th June 2019 for eligibility under the investigation category of SVLDRS. The court held that the petitioner's letter dated 6th May 2019 admitting a sum of Rs.22,00,414/- as payable, coupled with the Department's email dated 5th August 2019 calling for payment, constituted quantification under Section 121(r). The rejection of the declaration was set aside, and the respondents were directed to process the declaration under the investigation category. (Paras 2-10) B) Indirect Tax - SVLDRS - Interpretation of 'Quantified' - Section 121(r) of Finance (No.2) Act, 2019 - The court interpreted 'quantified' to include a written communication of duty liability admitted by the person during enquiry, investigation or audit, as clarified by the Board's circular dated 27th August 2019. The court distinguished the facts from Chaque Jour HR Services Pvt. Ltd. and JSW Steel Limited, where there was no admission or quantification. (Paras 7-9) C) Indirect Tax - SVLDRS - Eligibility under Investigation Category - Section 125(1)(e) of Finance (No.2) Act, 2019 - The court held that the petitioner's case fell under the investigation category because the tax dues were quantified before 30th June 2019 through the petitioner's admission and the Department's subsequent demand. The court directed the respondents to accept the declaration and grant consequential relief. (Paras 10-11)
Issue of Consideration
Whether the petitioner's tax dues were quantified on or before 30th June 2019, making it eligible under the 'Investigation, Enquiry or Audit' category of the Sabka Vishwas Legacy Dispute Resolution Scheme (SVLDRS)?
Final Decision
The court allowed the writ petition, quashed the rejection order dated 30th December 2019, and directed the respondents to process the petitioner's declaration under the investigation category and grant consequential relief as per the scheme.
Law Points
- Quantification of tax dues under SVLDRS includes written communication of duty liability admitted by the person during enquiry
- investigation or audit
- as per Section 121(r) of Finance (No.2) Act
- 2019
- Petitioner's letter admitting liability and Department's subsequent demand letter before 30th June 2019 constitute quantification
- Rejection of declaration under investigation category was improper
