Ms A K Dutta And Company Private Limited Represented Through Sri Ashwini Kumar Dutta vs. The Commissioner Of Central Goods Service Tax And Central Excise

Facts

The petitioners, M/s B.N. Dutta and M/s A.K. Dutta and Company Private Limited, filed writ petitions seeking directions to the respondents (CGST authorities) to sanction their applications under the Sabka Vishwas Legacy (Dispute Resolution) Scheme, 2019 (SVLDRS). They specifically sought adjustment of amounts paid as interest and penalty against their tax liabilities declared under the SVLDRS. The petitioners amended their petitions to confine their claims to the adjustment of Rs. 27,72,582/- paid as interest in one case and Rs. 16,38,670/- deposited as penalty in the other. The respondents argued that these payments were made as pre-deposits for appeals filed before the CESTAT and could not be adjusted against SVLDRS declarations, citing Section 123(2) of the SVLDRS Scheme, 2019.

Held

The Court held that no relief could be granted to the petitioners under the SVLDRS Scheme, 2019. The reasoning was based on the categorical statements made by the respondents in their supplementary counter affidavits to the interlocutory applications. These statements clarified that the payments sought to be adjusted by the petitioners were made as pre-deposits in light of CESTAT applications and against specific Orders-in-Original, and therefore, could not be adjusted against the payments made under SVLDRS. The Court also took into account the closure of the SVLDRS scheme on June 30, 2020. The ratio decidendi is that payments made as pre-deposits for appeals before a higher forum, such as the CESTAT, are distinct from payments made under a dispute resolution scheme like SVLDRS and cannot be unilaterally adjusted against the latter if the scheme's provisions or the revenue's stance prohibits it. The Court directed the petitioners to pursue their appeals before the CESTAT.

Key Issues

1. Whether the amounts paid by the petitioners as pre-deposits for CESTAT appeals can be adjusted against their liabilities declared under the Sabka Vishwas Legacy (Dispute Resolution) Scheme, 2019, particularly in light of Section 123(2) of the Scheme? Petitioner's contention: The petitioners argued that these payments should be adjusted, relying on a previous decision of the High Court in M/s Vassu Enterprises Vrs. Union of India. They sought to adjust interest paid in one case and penalty paid in another against their SVLDRS declarations. Respondent's contention: The respondents contended that the payments were made as pre-deposits in connection with CESTAT applications and against specific Orders-in-Original. They argued that these payments could not be adjusted towards the SVLDRS declarations, citing Section 123(2) of the SVLDRS Scheme, 2019. The respondents also noted that the SVLDRS scheme had closed on June 30, 2020.