M/S Reliable Homes vs. Union Of INDIA Through The Secretary Dept Of Revenue Ministry Of Finance And Ors

Held

The Court held that the petitioner is eligible to seek reliefs under the SVLDRS. The Court reasoned that the petitioner had admitted its tax liability during the enquiry, and the amount was quantified before the cut-off date of June 30, 2019, satisfying the definition of 'quantified' under Section 2(r) of the SVLDRS. The Court acknowledged that the rejection of the SVLDRS application was due to incorrect entries in the form, not due to the petitioner's ineligibility. The Court emphasized the twin objectives of the SVLDRS: liquidation of past disputes and disclosure of unpaid taxes, aiming to unload the baggage of pre-GST litigation. The Court directed Respondent No. 3 to consider the petitioner's representation for not imposing a penalty, keeping in mind the petitioner's attempt to avail the SVLDRS and the scheme's objective. The Court did not grant a specific direction regarding penalty waiver but requested Respondent No. 3 to consider it sympathetically.

Facts

The petitioner, M/s Reliable Homes, a partnership firm engaged in construction, is challenging a communication dated March 17, 2020, from Respondent No. 2, which rejected their SVLDRS-1 application filed on January 13, 2020. An enquiry initiated in June 2017 revealed an unpaid service tax liability. Investigations by the GST Commissionerate determined a total service tax liability of Rs. 60,04,710/-. The petitioner paid Rs. 2,18,717/-, and later an additional Rs. 25,77,768/-, leaving an outstanding amount of Rs. 57,85,993/-. A Show Cause Notice dated October 18, 2019, was issued for this amount, along with a demand for penalty. The petitioner subsequently filed an SVLDRS-1 application on December 25, 2019, which was initially processed with a NIL amount payable. However, a subsequently filed fresh SVLDRS-1 was rejected due to alleged incorrect mention of the duty demanded.

Key Issues

1. Whether the petitioner is eligible to make a declaration and seek reliefs under the Sabka Viswas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) given that its tax liability was quantified on or before June 30, 2019, as per Section 2(r) of the SVLDRS, based on an admission made during an enquiry on June 29, 2017? The petitioner argued that they admitted their tax liability during the enquiry, and the amount was quantified before the cut-off date, making them eligible. They relied on this Court's order in B Chopda Construction Pvt Ltd. Vs. Union of India. The petitioner also contended that the rejection of their SVLDRS application was due to minor errors in form filing, not ineligibility, and that the scheme's objective is to resolve legacy disputes. They cited Thought Blurb Vs. Union of India for the scheme's objectives. The revenue did not record specific arguments against the petitioner's eligibility for the scheme itself but focused on procedural aspects and the scope of relief.