Case Note & Summary
The petitioner, Deelight Fortune Private Limited, a company incorporated under the Companies Act, 1956, had given its commercial premises on leave and license basis. With the amendment to Section 65(105)(zzzz) of the Finance Act, 1994 by the Finance Act, 2010, renting of property became taxable with effect from 1 June 2007. The petitioner obtained service tax registration under 'Renting of Immovable Property Service' from 16 June 2011. However, the petitioner did not pay service tax under the belief that mere letting out was not a service. The petitioner raised invoices on the licensee for service tax, which the licensee paid. The Service Tax Voluntary Compliance Encouragement Scheme, 2013 (VCES) was introduced by Chapter VI of the Finance Act, 2013. The petitioner filed a declaration under VCES on 31 December 2013, but the VCES application was not processed. Subsequently, the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) was enacted under Chapter V of the Finance (No.2) Act, 2019. The petitioner filed an application under the SVLDRS, which was rejected by the Designated Committee on the ground that the petitioner had already made a voluntary disclosure under VCES. The petitioner challenged this rejection by way of a writ petition. The court examined the provisions of Section 125(1)(e) of the Finance (No.2) Act, 2019, which excludes persons who have made a voluntary disclosure under VCES. The court noted that the petitioner's VCES declaration was not a 'voluntary disclosure' as the VCES application was not filed within the time prescribed under the VCES and was not processed. The court held that the Designated Committee's rejection was erroneous and directed the committee to consider the petitioner's application afresh in accordance with law.
Headnote
A) Service Tax - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Eligibility - Section 125 of Finance (No.2) Act, 2019 - The petitioner's application under the Scheme was rejected on the ground that it had already made a voluntary disclosure under VCES, 2013 - The Court held that the petitioner's VCES declaration was not a 'voluntary disclosure' under Section 125(1)(e) of the Finance (No.2) Act, 2019 as the VCES application was not filed within the time prescribed under the VCES and was not processed - The Court allowed the petition and directed the Designated Committee to consider the petitioner's application afresh (Paras 1-23).
Issue of Consideration
Whether the Designated Committee was correct in rejecting the petitioner's application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 on the ground that the petitioner had already made a voluntary disclosure under the Service Tax Voluntary Compliance Encouragement Scheme, 2013?
Final Decision
The court allowed the writ petition, quashed the rejection order, and directed the Designated Committee to consider the petitioner's application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 afresh in accordance with law.
Law Points
- Sabka Vishwas (Legacy Dispute Resolution) Scheme
- 2019
- Section 125 of Finance (No.2) Act
- Section 106 of Finance Act
- 2013
- Service Tax Voluntary Compliance Encouragement Scheme
- Renting of Immovable Property Service
