M/S. Orissa Stevedores LTD. vs. Designated Committee,Central GST And Customs
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Cause title — parties, addresses and appearances
J U D G M E N T
------------------------------------------------------------------------------------- Dates of hearing: 29th August, 2024 and 23rd October, 2024 Date of judgment: 23rd October, 2024
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ARINDAM SINHA, J.
Mr. Sahoo, learned senior advocate appears on behalf of petitioner and submits his client was issued show cause notice (SCN) dated 23rd April, 2015 alleging short payment of
W.P.(C) No.25292 of 2020 service tax for period 2013-14. Pursuant to receiving the SCN his client applied under Sabka Vikas (Legacy Dispute Resolution) Scheme, 2019 in prescribed form SVLDRS-1. He demonstrates from the form, SCN date is 23rd April, 2015 and demand for tax in excess of ₹16.15 crores. In the form his client had claimed deposit of duty at almost ₹10 crores.
Revenue issued SVLDRS-2 reiterating tax due on allegation that there was zero pre-deposit. He points out from disclosures in the writ petition, his client had applied for information and it was obtained. The information was, his client had claimed adjustment of CENVAT credit at approximately ₹19.15 crores and made cash payment of ₹26 crores. He submits, thereby stands demonstration that the adjustment and payments were for financial year 2013-14. This was not taken into account in issuing, SVLDRS-2 and thereafter SVLDRS-3. 3. Mr. Sahoo then draws attention to circular dated 27th August, 2019 issued by Government of India, Ministry of Finance Department of Revenue, Central Board of Indirect
W.P.(C) No.25292 of 2020 Taxes and Customs. He points out from clause (c) in paragraph 10 that even disputed amount of CENVAT credit is to be adjusted under the scheme. The clause is reproduced below. “(c) This Scheme provides for adjustment of any amount paid as pre-deposit during appellate proceedings or as deposit during enquiry, investigation or audit [Sections 124(2) and 130(2) refer]. In certain matters, tax may have been paid by utilizing the input credit, and the matter is under dispute. In such cases, the tax already paid through input credit shall be adjusted by the Designated Committee at the time of determination of the final amount payable under the Scheme.” (emphasis supplied) His client has thus moved Court to show pre-deposit by aggregate of cash and credit. Inspite thereof, upon issuance of SVLDRS-3 and during pendency of the writ petition, notice dated 5th February, 2021 was issued, purportedly to give opportunity of personal hearing. This notice is perpetration of the department’s contention that his client is not entitled to the relief under the scheme. Hence, the SCN and subsequently
W.P.(C) No.25292 of 2020 issued notice for personal hearing, brought on record by amendment, are under challenge. He submits, the notice be set aside for the matter to be restored to the Department/Designated Committee, for reconciliation.
Mr. Satapathy, learned advocate, Senior Standing Counsel appears on behalf of revenue and opposes the writ petition. He submits, particulars of the cash payments, brought on record from information obtained include payments made for other period(s). So far as the CENVAT credit is concerned, it was disallowed. It cannot be adjusted.
Considering pursuant to the SCN petitioner had applied under the scheme and in view of aforesaid facts, we direct that the personal hearing will be for purpose of the Department/Designated Committee to conclude on petitioner’s assertion that 50% or more of the demand was paid and it is entitled to relief against the balance, under the scheme. The Department/Designated Committee will do well to pass a reasoned order such that points urged by petitioner in the writ petition and as may be urged before it regarding the scheme
W.P.(C) No.25292 of 2020 applying to it, are dealt with without leaving any ambiguity. In event the Department/Designated Committee concludes that petitioner is not entitled to relief under the scheme, it will then issue fresh notice for personal hearing on the demand. We make this direction in view of clause (c) in aforesaid circular dated 27th August, 2019 and absence of anything on record or submission made that exercise of reconciliation was undertaken in respect of the particulars of the cash payments.
Be it recorded that there was no issue before us regarding petitioner having duly applied under the scheme.
The writ petition is disposed of.
(Arindam Sinha)
Judge
(M.S. Sahoo)
Judge
Jyoti
Reproduced from the public record of the Orissa High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.