Case Note & Summary
The petitioner, Munish Rajkumar Mahajan, proprietor of KDS Security Services, filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court. The petitioner was engaged in providing security and detective agency services and held registration under Service Tax law and GST law. The petitioner had received a show cause notice demanding service tax, and subsequently, an Order-in-Original dated 23rd December 2019 confirmed a demand of Rs.39,47,420/-. The petitioner opted for the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) and filed declaration SVLDRS-1 declaring the tax dues as Rs.39,47,420/-. However, the Designated Committee issued a communication dated 31st December 2021 demanding Rs.1,05,26,453/- as the tax dues, which was the amount mentioned in the show cause notice, not the confirmed demand. The petitioner sought a writ of mandamus directing the Designated Committee to consider the tax dues as Rs.39,47,420/- and compute the amount payable at 40% thereof under Section 124(c)(i) of the Finance (No.2) Act, 2019, i.e., Rs.15,78,968/-. The respondents argued that the Designated Committee had the discretion to determine the tax dues based on the show cause notice. The Court analyzed the provisions of the SVLDRS and held that the scheme aims to resolve legacy disputes on the basis of the confirmed demand, not the show cause notice. The Court noted that the petitioner's declaration was consistent with the Order-in-Original, and the Designated Committee had no jurisdiction to unilaterally increase the tax dues based on the show cause notice. The Court allowed the petition, directing the Designated Committee to compute the tax dues as declared and issue the discharge certificate within four weeks.
Headnote
A) Tax Law - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Computation of Tax Dues - Section 124(c)(i) of Finance (No.2) Act, 2019 - The petitioner declared tax dues of Rs.39,47,420/- as per the confirmed demand in Order-in-Original dated 23rd December 2019. The Designated Committee issued a communication demanding Rs.1,05,26,453/- based on the show cause notice amount. The Court held that the Designated Committee must compute the tax dues based on the amount of demand confirmed in the Order-in-Original, as the scheme intends to resolve disputes on the basis of the confirmed demand, not the show cause notice. (Paras 2-10) B) Constitutional Law - Writ of Mandamus - Article 226 of Constitution of India - The Court issued a writ of mandamus directing the Designated Committee to consider the tax dues as Rs.39,47,420/- and compute the amount payable at 40% thereof under Section 124(c)(i) of the Finance (No.2) Act, 2019, i.e., Rs.15,78,968/-, and to issue the discharge certificate accordingly. (Paras 10-12)
Issue of Consideration
Whether the Designated Committee under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 is bound to compute the tax dues based on the amount of demand confirmed in the Order-in-Original, as declared by the petitioner in SVLDRS-1, or can it adopt a higher amount from the show cause notice?
Final Decision
The Court allowed the petition and directed the Designated Committee to consider the tax dues as Rs.39,47,420/- and compute the amount payable at 40% thereof under Section 124(c)(i) of the Finance (No.2) Act, 2019, i.e., Rs.15,78,968/-, and to issue the discharge certificate within four weeks.
Law Points
- Sabka Vishwas (Legacy Dispute Resolution) Scheme
- 2019
- Section 124(c)(i) of Finance (No.2) Act
- tax dues computation
- confirmed demand vs show cause notice amount
- SVLDRS-1 declaration
- Designated Committee's jurisdiction
