Gautam Hospitality Private Limited vs. The Principal Commissioner GST And Central Excise And Anr.

Facts

Gautam Hospitality Private Limited (Petitioner) filed a writ petition challenging the rejection of its application under the Sabka Vishwas – (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS). The rejection was based on the ground that the tax amount was not quantified before June 30, 2019, and an investigation was ongoing. The Petitioner had admitted service tax liability for financial years 2013-14 to 2017-18, amounting to Rs. 3,77,61,635/-, through declarations made on December 15, 2017, and March 26, 2019, before the Directorate General of GST Intelligence. The SVLDRS application was filed on January 13, 2020, and subsequently rejected. The Petitioner argued that the admissions constituted quantification of duty. The Respondents failed to file a reply affidavit despite multiple opportunities.

Held

The Court held that the Petitioner was eligible to avail the benefits of the SVLDRS Scheme. The admissions of service tax liability made by the Petitioner on December 15, 2017, and March 26, 2019, constituted 'quantification' of the duty payable, as defined under Section 121(r) of the Finance Act, 2019, and clarified by the Revenue's Circular dated August 27, 2019. The Court found that this quantification occurred well before the cut-off date of June 30, 2019. Therefore, the rejection of the Petitioner's SVLDRS application based on the ground that the amount was not quantified before the cut-off date was illegal. The Court quashed and set aside the rejection orders and directed the department to consider the Petitioner's application in accordance with law and pass appropriate orders within six weeks. Consequently, the Show Cause Notices dated December 22, 2020, and February 19, 2021, were also quashed.

Key Issues

1. Whether the Petitioner's admission of service tax liability through declarations made on December 15, 2017, and March 26, 2019, constitutes 'quantification' of duty payable under Section 121(r) of the Finance Act, 2019, for the purpose of eligibility under the SVLDRS Scheme, specifically concerning the condition in Section 125(1)(e) that the amount of duty involved in an enquiry or investigation must be quantified on or before June 30, 2019? Petitioner's Contention: The Petitioner argued that the declarations admitting the tax liability were sufficient to qualify as 'quantification' as per the scheme's definition and the clarification provided in the Revenue's Circular dated August 27, 2019. They relied on the fact that the admissions were written communications of the amount of duty payable and cited the case of Sabareesh Pallikere Vs. Jurisdictional Designated Committee. Revenue's Contention: The Revenue opposed the petition but was unable to satisfy the Court regarding the position taken in their own circular and the Petitioner's submissions.