Case Note & Summary
The petitioner, Jai Sai Ram Mech & Tech India P Ltd, a private limited company engaged in construction services and registered under the Finance Act, 1994, was subjected to an enquiry by Respondent No. 3 for alleged short payment of service tax for the period April 2012 to June 2017. During the enquiry, the director of the petitioner, Mr. Surajpal Singh, gave a statement on 09.04.2019 admitting service tax liability of approximately Rs. 40 to Rs. 45 lakhs. Subsequently, the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 was introduced by the Finance (No. 2) Act, 2019. The petitioner filed a declaration under the scheme on 08.12.2019 under the category 'investigation, enquiry or audit' with sub-categorisation 'investigation by commissionerate', disclosing the quantum of service tax liability at Rs. 43,37,865 and a pre-deposit of Rs. 18,26,253. However, by order dated 02.01.2020, the Designated Committee rejected the declaration on the ground of ineligibility, stating that the amount of service tax liability was not quantified before 30.06.2019, the cutoff date under the scheme. Aggrieved, the petitioner filed the present writ petition under Article 226 of the Constitution of India seeking quashing of the rejection order and a direction to reconsider the declaration. The respondents filed a reply affidavit contending that the petitioner had agreed to produce financial documents but failed to do so, and therefore, under Section 125(1)(e) of the Finance (No. 2) Act, 2019, the amount was not quantified before the cutoff date. The High Court, after hearing both sides, observed that the admission of liability in the statement recorded on 09.04.2019 clearly quantified the tax dues before 30.06.2019. The court held that the Designated Committee erred in rejecting the declaration and quashed the impugned order. The court directed the respondents to reconsider the declaration afresh, treating the statement of the director as quantification of the tax dues, and to grant relief under the scheme in accordance with law. The writ petition was allowed.
Headnote
A) Service Tax - Sabka Vishwas Scheme - Eligibility - Quantification of Tax Liability - Section 125(1)(e) Finance (No. 2) Act, 2019 - Petitioner's director admitted service tax liability of Rs. 40-45 lakhs in a statement recorded on 09.04.2019 before the respondents. The Designated Committee rejected the declaration under the scheme on the ground that the amount was not quantified before 30.06.2019. The High Court held that the admission in the statement constitutes quantification of the tax liability, as the amount was clearly admitted and thus quantified before the cutoff date. The court directed the respondents to reconsider the declaration and grant relief under the scheme. (Paras 2-10) B) Service Tax - Sabka Vishwas Scheme - Rejection of Declaration - Remand - Section 125(1)(e) Finance (No. 2) Act, 2019 - The court found that the Designated Committee erred in rejecting the declaration without considering the admission of liability in the statement. The impugned order dated 02.01.2020 was quashed and set aside, and the matter was remanded to the Designated Committee for fresh consideration, directing that the statement of the director be treated as quantification of the tax dues. (Paras 9-10)
Issue of Consideration
Whether the admission of service tax liability by the petitioner's director in a statement recorded on 09.04.2019 amounts to quantification of the amount of duty involved on or before 30.06.2019, making the petitioner eligible under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
Final Decision
The High Court allowed the writ petition, quashed the impugned order dated 02.01.2020, and directed the respondents to reconsider the petitioner's declaration afresh, treating the statement of the director dated 09.04.2019 as quantification of the tax dues, and to grant relief under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 in accordance with law.
Law Points
- Quantification of tax liability
- Admission in statement as quantification
- Sabka Vishwas (Legacy Dispute Resolution) Scheme
- 2019
- Section 125(1)(e) Finance (No. 2) Act
- Cutoff date 30.06.2019
