In an assessee-favouring ruling, a division bench of the Orissa High Court headed by the Chief Justice S Muralidhar has held that the benefit of the SVLDR Scheme cannot be denied to the taxpayer merely on ground of erroneous interpretation of the relevant tax statutes.
The petitioner, M/s. UITC India Pvt. Ltd manufacture Process Oil falling under Chapter sub-heading 2710 1990 of the erstwhile CET Act. The petitioner filed applications under the SVLDR-1 for availing the benefit of the said Scheme. The Department however rejected the applications on the ground ineligibility observing that in terms of Section 125(1)(h) of the Finance Act, 2019 “the product falling under the Fourth Schedule to the CE Act is not eligible for this Scheme”.
Chief Justice S Muralidhar and Justice M.S. Raman analyzed the relevant provisions and held that “the above interpretation placed by the Department on Section 125(1)(h) of the Finance Act, 2019 appears not to be correct. No doubt that the Petitioner’s product (Process Oil) falls under the Fourth Schedule to the CE Act but as far as the rate of duty is concerned, as already noticed, what is indicated is ‘…..’. The said ‘…..’ has been defined as indicating that in respect of the goods against which the above ‘…..’ is found, excise duty is not leviable at all. Therefore, there is no question of the Petitioner’s product being outside the purview of the SVLDR Scheme read with the Fourth Schedule to the CE Act. The Court, therefore, rejects the plea of the Department that the Petitioner would be ineligible for the benefit of the SVLDR Scheme.”
Allowing the writ petition, the High Court ordered that “A direction is issued to the Department to process the Petitioner’s applications for amnesty under the SVLDR Scheme and after hearing the Petitioner on a date to be informed to the Petitioner at least one week in advance and to pass a reasoned order on the Petitioner’s applications under the said SVLDR Scheme within a period of four weeks thereafter and, in any event, on or before 13th February, 2023 with the order being communicated to the Petitioner within a week thereafter. No further directions are called for.”
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