Badrilal Ghasiram Choudhary vs. Union Of INDIA Thr The Secetary Ministry Of Law And Justice And Anr

Facts

The Petitioner, Badrilal Ghasiram Choudhary, challenged an Order-in-Original dated March 7, 2024, passed by Respondent No. 2 (Commissioner CGST & C Ex Nashik). This order arose from a Show Cause Notice dated April 20, 2021, demanding Rs. 2,32,64,372/- as service tax liability. The Petitioner contended that they had settled this dispute by applying under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, filing a declaration on December 9, 2019, for a dispute of Rs. 1,97,09,571/-. The Petitioner claimed their application was allowed, the amount paid, and a Discharge Certificate was issued by the GST Authority on June 30, 2020. The Respondents, through their counsel, confirmed that the Petitioner had settled the dispute under the Sabka Vishwas Scheme and a Discharge Certificate was indeed issued.

Held

The Court held that the impugned Order-in-Original No. NSK/CGST-ST/COM/049/2023-24 dated March 7, 2024, issued by the Commissioner CGST & C Ex Nashik, was liable to be quashed and set aside. The Court accepted the statement made by the advocate for the Respondents, which confirmed that the Petitioner had indeed settled the dispute by availing the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, and that a Discharge Certificate was issued on June 30, 2020. The reasoning was that once a dispute is settled under a beneficial scheme like Sabka Vishwas and a discharge certificate is issued, the revenue cannot pursue the same demand through a subsequent order. The ratio decidendi is that a settlement under a statutory dispute resolution scheme, evidenced by a discharge certificate, extinguishes the underlying tax liability and any subsequent adverse order is unsustainable. The Court quashed and set aside the impugned order. There were no issues left undecided.

Key Issues

1. Whether the impugned Order-in-Original dated March 7, 2024, passed by Respondent No. 2, is liable to be quashed and set aside on the grounds of violation of principles of natural justice and fair play, given the Petitioner's settlement of the dispute under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. Petitioner's Contention: The Petitioner argued that the dispute was fully and finally settled by availing the Sabka Vishwas Scheme, a declaration was filed, the amount of Rs. 1,97,09,571/- was paid, and a Discharge Certificate was issued on June 30, 2020. Therefore, the subsequent Order-in-Original demanding service tax was erroneous and passed in violation of natural justice. Respondents' Contention: The Respondents, on instructions, admitted that the Petitioner had settled the dispute by paying the outstanding amount under the Sabka Vishwas Scheme and that a Discharge Certificate was issued. They acknowledged that the Petitioner did not attend personal hearings, leading to an ex parte order, but ultimately conceded that the Petition should be allowed.