The Bombay High Court remanded back the matter to the Designated Committee to consider afresh declaration under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) and grant consequential relief.
The petitioner, M/s. K. N. Rai is a proprietorship firm which is engaged in providing construction services to various government, local authorities etc. under the category of āworks contract servicesā.
The petitioner has stated that its services were exempted from service tax in view of Exemption Notification dated June 20, 2012, as amended from time to time.
An enquiry was initiated by the Service Tax Department against the petitioner for the period from 2014-15 to June, 2017 on the ground that services provided by the petitioner were taxable and not exempted in terms of the aforesaid notification.
It is submitted that pursuant to subsequent amendments carried out in the said notification certain services which were earlier exempt became taxable with effect from April 1, 2015. According to the petitioner it did not pay taxes for the services provided which became taxable later on after withdrawal of exemption.
In the meanwhile, Central Government introduced the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (briefly āthe Schemeā hereinafter) vide the Finance (No.2) Act, 2019 to bring to an end pending litigations of central excise and service tax under the erstwhile indirect tax regime by providing benefits to the declarants subject to eligibility.
The petitioner informed respondent authority about its willingness to apply under the scheme further stating that it had admitted tax liability of Rs.1,26,54,725.00 for the period from 2014-15 to 2017-18 as quantified in the statement of the proprietor dated June 28, 2019.
The petitioner submitted the declaration in terms of the said scheme under the category of investigation, enquiry or audit and within the sub-category of investigation by DGGI. In the said declaration petitioner mentioned the duty payable at Rs.1,25,54,725.
However, the authority rejected its declaration on the ground that quantification of the tax dues was not made final by June 30, 2019 which was the cut off date.
The division bench of Justice Ujjal Bhuyan and Justice Abhay Ahuja held that respondent authorities were not justified in rejecting the declaration of the petitioner under the scheme on the ground that quantification of tax dues was not made final on or before June 30, 2019.
Therefore, the court remanded back the Matter is to respondent authorities to consider the declaration of the petitioner as a valid declaration under the category of investigation, enquiry or audit in terms of the scheme and after giving due opportunity of hearing grant the consequential relief to the petitioner.
The court directed that the above exercise shall be carried out within a period of six weeks.
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