Case Note & Summary
The petitioner, M/s. New India Civil Erectors Private Limited, a company engaged in civil, mechanical, and construction contracts, filed a writ petition under Article 226 of the Constitution of India challenging the order dated 29.01.2020 passed by the designated committee (respondent No.4) rejecting its declaration dated 26.12.2019 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The petitioner had not received legitimate payments for a contract with Bharat Oman Limited during 2008-10, leading to inability to discharge service tax liability for the period from 01.04.2015 to 30.06.2017. Summons under Section 70 of the Central Goods and Services Tax Act, 2017 were issued on 19.12.2019, and statements of the petitioner's accountant and legal consultant were recorded, admitting service tax dues of Rs.94,26,823.00 with interest and penalty. Meanwhile, the central government introduced the Sabka Vishwas Scheme, and the petitioner filed a declaration on 26.12.2019. The designated committee rejected the declaration without providing reasons or considering the petitioner's explanation. The High Court found that the rejection order was passed without application of mind and in violation of principles of natural justice. The court quashed the impugned order and directed the designated committee to reconsider the petitioner's declaration afresh, after giving the petitioner an opportunity of hearing, and to pass a reasoned order within four weeks.
Headnote
A) Service Tax - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Rejection of Declaration - The petitioner, a service provider, filed a declaration under the Scheme for service tax dues for the period 2015-16 to 30.06.2017. The designated committee rejected the declaration without providing reasons or considering the petitioner's explanation. The High Court held that the rejection order was passed without application of mind and in violation of principles of natural justice, and directed reconsideration. (Paras 2-13) B) Constitutional Law - Article 226 - Writ Jurisdiction - The High Court exercised its writ jurisdiction to quash an order that was arbitrary and lacked reasoning, emphasizing that quasi-judicial authorities must pass reasoned orders. (Paras 2, 13) C) Central Goods and Services Tax Act, 2017 - Section 70 - Summons - The summons issued under Section 70 of the CGST Act for enquiry did not preclude the petitioner from availing the benefit of the Sabka Vishwas Scheme, as the Scheme was intended to resolve legacy disputes. (Paras 5, 13)
Issue of Consideration
Whether the designated committee's rejection of the petitioner's declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 was valid and in accordance with law.
Final Decision
The High Court allowed the writ petition, quashed the impugned order dated 29.01.2020, and directed the designated committee to reconsider the petitioner's declaration afresh, after giving the petitioner an opportunity of hearing, and to pass a reasoned order within four weeks.
Law Points
- Sabka Vishwas (Legacy Dispute Resolution) Scheme
- 2019
- Section 70 of Central Goods and Services Tax Act
- 2017
- Article 226 of Constitution of India
- Natural Justice
- Non-application of mind
