Hansuttam Finance LTD vs. Principal Commissioner Of Central Excise Goods And Service Tax Delhi South Commissionerate & Ors.

Held

The Court held that the service tax dues payable by the petitioner were indeed quantified before the stipulated date of 30.06.2019, making it eligible for the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The Court reasoned that the petitioner had provided detailed reconciliation statements and interest calculations to the respondents, which were acknowledged and not disputed. The respondents' letter dated 03.06.2019, calling for challans of remaining service tax and calculation sheets for interest, indicated an acceptance of the petitioner's figures. Furthermore, the impugned demand-cum-show cause notice itself was based on figures materially similar to those provided by the petitioner, demonstrating that the tax dues had been quantified. The Court found the rejection order unsustainable, as the Scheme explicitly covers cases where investigations are pending. The ratio decidendi is that a tax liability is considered 'quantified' for the purpose of the SVLDRS Scheme when the taxpayer provides detailed calculations and reconciliation statements, and the revenue authorities do not dispute these figures, even if a formal assessment order has not been passed, especially when the subsequent demand notice relies on similar figures. The Court allowed the petition, directing the respondents to process the petitioner's declaration under the Scheme and set aside the impugned notice.

Facts

The petitioner, Hans Uttam Finance Limited, filed a writ petition challenging an order dated 02.03.2020 rejecting its declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, and a subsequent demand-cum-show cause notice dated 30.12.2020. The notice sought to recover service tax of ₹3,75,957/-, interest of ₹34,87,497/-, and penalties for the period 2014-15 to 2017-18. The petitioner had previously attempted to avail the Service Tax Voluntary Compliance Encouragement Scheme, 2013 (VCES) by declaring ₹36,47,132/- in service tax dues and paying ₹18,50,000/-, but failed to pay the balance and had its declaration rejected. Investigations were conducted, and the petitioner made further payments and submissions regarding its service tax liability and interest. The respondents rejected the SVLDRS declaration, stating that the service tax amount was not 'quantified' before the stipulated date of 30.06.2019.

Key Issues

1. Whether the service tax payable by the petitioner was 'quantified' within the meaning of Clause (r) of Section 121 of the Finance Act (No.2), 2019, before 30.06.2019, thereby making it eligible for the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019? Petitioner's arguments: The petitioner contended that its service tax dues were quantified through various submissions, including reconciliation statements and interest calculation sheets provided to the respondents between February 2019 and July 2019. It argued that the respondents had accepted these statements and had not disputed the calculations, even using similar figures in their own demand notice. The petitioner asserted that the Scheme expressly includes cases where investigations are pending, and the rejection order's reasoning was unsustainable. Respondents' arguments: The respondents argued that the petitioner was not entitled to the benefit of the Scheme because, at the material time, an investigation concerning the petitioner was pending, and the amount of service tax was not 'quantified' before the stipulated date of 30.06.2019, as required by Clause (r) of Section 121 of the Finance Act (No.2), 2019.