Quest Retail Private Limited vs. Principal Commissioner CGST And Another

Facts

The petitioner, Quest Retail Private Limited, is a registered service provider. They filed an application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) under the 'Litigation' category and 'Appeal Pending' sub-category with the 'Supreme Court' forum. The respondent authorities were in the process of rejecting their application, as indicated by Annexure P-9, and subsequently passed a final order (Annexure P-11). The rejection was based on the grounds that no Show Cause Notice or Order-in-Original had been issued by the department, rendering the petitioner ineligible for the scheme. The petitioner challenged this rejection before the High Court.

Held

The Court allowed the writ petition, setting aside the final order (Annexure P-11). The Court relied on the judgment of the Bombay High Court in Nilkamal Limited's case, which referenced a clarificatory circular. The reasoning was that the petitioner should be allowed to avail the benefits of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, in light of the Bombay High Court's decision and the clarificatory nature of the circular. The matter was remanded back to the designated Committee to pass a fresh order in accordance with the clarificatory circular and the Bombay High Court's judgment. The ratio decidendi is that clarificatory circulars, when relied upon by a High Court, should be applied to similar cases, and eligibility for the SVLDRS should be considered in light of such clarifications, even if the strict procedural requirements for a show cause notice were not met.

Key Issues

1. Whether the petitioner is eligible to file a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, specifically under the 'Litigation' category and 'Appeal Pending' sub-category with the 'Supreme Court' forum, given that no Show Cause Notice or Order-in-Original was issued by the department. Petitioner's contention: The petitioner relied on the judgment of the Bombay High Court in Nilkamal Limited and others Vs. The Union of India and others, which referred to Circular No. 1073/06/2019. This circular clarified that entities initiating proceedings against lessors for non-payment of service tax on rent could be allowed to file a declaration under the SVLDRS, and their cases could be considered for the scheme's benefits. The petitioner argued that this circular is clarificatory in nature and that they should be allowed to avail the scheme's benefits, provided they comply with all conditions. Respondent's contention: The respondent's counsel was unable to dispute the judgment cited by the petitioner.