M/S. Ganga Grandeur vs. The Designated Committee

Held

The Court held that the communication dated 07.06.2019, issued by the Superintendent of GST, could be considered a conclusive communication for the purpose of availing the benefit under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The Court reasoned that the language used in the communication clearly indicated a determination of service tax payable by the petitioner, along with interest, and explicitly directed the petitioner to pay the amounts. The Court found that merely because procedural formalities, such as the approval by the Monetary Committee Meeting (MCM), took time, it should not prevent the petitioner from availing the scheme. The Court emphasized that such schemes are designed by the government to facilitate taxpayers in default to pay their dues, and technical objections raised by the respondent would be detrimental to the very purpose of the scheme. Therefore, the impugned order rejecting the petitioner's declaration was quashed. The matter was remitted back to the respondent for reconsideration, with directions to process the petitioner's application and pass necessary orders allowing the petitioner to avail the benefit of the scheme within 30 days.

Facts

The petitioner, M/s. Ganga Grandeur, operating a Mandapam, was subjected to a service tax audit in May 2019. Following the audit, the Superintendent of GST, Tirunelveli, issued a letter on June 7, 2019, detailing issues such as non-payment of interest on delayed service tax, non-payment of service tax on advances collected, and short payment of service tax on Mandap Keeper Services, quantifying the amounts. The petitioner expressed willingness to pay and avail the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. However, their declaration under the scheme was rejected by the Designated Committee via an order dated May 12, 2020. The rejection was based on the ground that the final audit para was communicated on December 13, 2019, which was after the cut-off date of June 30, 2019, stipulated by Section 125(1)(e) of the Finance (No.2) Act, 2019.

Key Issues

1. Whether the communication dated 07.06.2019, issued by the Superintendent of GST, can be considered a conclusive communication for the purpose of availing the benefit under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, despite the final audit para being issued later? Petitioner's contention: The communication dated 07.06.2019, which demanded payment of service tax and interest arising from the audit, should be treated as a conclusive communication for the scheme's eligibility. The subsequent delay in issuing the final audit para (December 13, 2019), which was beyond the scheme's cut-off date of June 30, 2019, should not disentitle the petitioner from availing the scheme. Revenue's contention: The eligibility under Section 125(1)(e) of the Finance (No.2) Act, 2019, requires the amount of duty involved in an enquiry, investigation, or audit to be quantified on or before June 30, 2019. In this case, only a draft audit para was submitted before the Monetary Committee Meeting (MCM) on June 13, 2019, and the final audit para was communicated to the petitioner only on December 13, 2019, which is after the cut-off date. Therefore, the petitioner is not eligible.