M/S Kountheya Hotels PVT LTD vs. The Union Of INDIA

Held

The Court held that the endorsement dated 05.05.2020 was bad in law. It reasoned that Section 123(c) of the SVLDRS Scheme defines 'tax dues' as the amount of duty quantified on or before 30.06.2019. Furthermore, Section 125(1)(e) explicitly states that a person is ineligible if the amount of duty involved in an audit has not been quantified on or before 30.06.2019. The Court found that Annexure-B, the Audit Report dated 04.06.2019, clearly indicated quantification prior to the cut-off date. This fact was not controverted by the respondent department. Therefore, the petitioner's case prima facie met the requirement of quantification before 30.06.2019. The Court set aside the endorsement and directed the respondent No.3 to reconsider the petitioner's application afresh in light of these observations.

Facts

The petitioner, M/s. Kountheya Hotels Pvt. Ltd., filed a writ petition challenging an endorsement dated 05.05.2020 issued by the Designated Committee under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS). The endorsement rejected the petitioner's SVLDRS application, stating ineligibility because the quantification of tax dues, as per an Audit Report dated 04.12.2019, was made after the cut-off date of 30.06.2019. The petitioner contended that the Audit Report was dated 04.06.2019, indicating quantification prior to the stipulated date. The respondent department argued that the decision was based on information furnished by the petitioner and was therefore correct.

Key Issues

1. Whether the endorsement dated 05.05.2020, rejecting the petitioner's application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, is bad in law, considering the date of quantification of tax dues. Petitioner's contention: The petitioner argued that the endorsement is bad in law, relying on Section 123(c) and Section 125(1)(e) of the SVLDRS Scheme. They asserted that the Audit Report, which quantified the Service Tax involved, was dated 04.06.2019, thus meeting the requirement of quantification on or before 30.06.2019. Respondent's contention: The respondent department contended that the decision to reject the application was made in conformation with the endorsement, which was based on information furnished by the petitioner, and therefore, the endorsement could not be faulted.