N K Power And Infrastructure Private Limited vs. The Union Of INDIA And 3 Ors
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The petitioner, N K Power and Infrastructure Private Limited, engaged in work contract services, received a show cause notice dated 28.12.2018 alleging wrong availment of CENVAT credit amounting to Rs. 1,57,51,593/- in contravention of Rule 2A of the Service Tax (Determination of Value) Rules, 2006 and CENVAT Credit Rules, 2004. The petitioner sought benefit under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. Their application was rejected by an order dated 12.02.2020 because they declared the penalty amount as Rs. 0, when in fact, penalties had been imposed. The petitioner contended this was an inadvertent mistake.
Held
The Court held that an inadvertent mistake in declaring the penalty amount as Rs. 0 in an application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, should not lead to the rejection of the application if no undue benefit has been accrued to the assessee. This decision followed the proposition laid down in the Court's previous judgment dated 04.05.2020 in WP(C) 2149/2020. The reasoning was that such an oversight, whether due to carelessness or a simple mistake, should not be penalized, as it does not confer any unfair advantage on the assessee. Consequently, the Court directed the petitioner to file a fresh application before the Principal Commissioner, GST, Guwahati. The Principal Commissioner is required to pass a reasoned order, taking into account the principles from the cited judgment and providing a copy of the judgment to the petitioner. This reasoned order must be completed within three months of receiving the application. No specific issue was left undecided.
Key Issues
1. Whether an inadvertent mistake in declaring the penalty amount as Rs. 0 in an application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, should lead to the rejection of the application, particularly when no undue benefit was accrued to the assessee? Petitioner's contention: The petitioner argued that the omission of penalty amounts was an inadvertent mistake due to oversight and should not be penalized, referencing the principle laid down in a previous judgment of the same court in WP(C) 2149/2020. They emphasized that no undue benefit was gained by not mentioning the penalties. Revenue's contention: The judgment does not record any specific arguments made by the revenue or state in opposition to the petitioner's claim regarding the inadvertent mistake.
Sections Cited
Rule 2A of the Service Tax (Determination of Value) Rules, 2006, CENVAT Credit Rules 2004, Rule 5 of the Sabka Vikas (Legacy Dispute Resolution) Rules, 2019
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORDER Date : 19-07-2021 Heard Mr. R.S. Mishra, learned counsel for the petitioner. Also heard Mr. S.C. Keyal, learned standing counsel for the authorities under the GST being the respondent No.2, 3 and 4 and Mr. S.K. Medhi, learned counsel CGC for the respondent No.1. 2. The petitioner is engaged in the business of work contract services bearing GST registration No. AACCN9548F 001. The petitioner was issued a show cause notice bearing No. F.No.DGCEI/GRN/INV/ST/02/2016/6035 dated 28.12.2018 raising the allegation that they have taken wrong benefit of CENVAT amounting to Rs.1,57,51,593/- in contravention of the provision of Rule 2A of the Service Tax (Determination of Value) Rules, 2006 as well as CENVAT Credit Rules 2004, the petitioner takes the stand that they are entitled to the benefit under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. 3. Accordingly, the petitioner made an application for relief under the said scheme. But the claim of the petitioner made in the application stood rejected by the order dated 12.02.2020 on the ground that an incorrect declaration had been provided in the application form. According to the petitioners they had inadvertently failed to mention certain penalty amounts they were imposed upon them earlier and instead have mentioned the penalty imposed to be Rs.
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The implication of rejecting the application under the scheme for having mentioned the penalty to be Rs.0 was given a consideration by this Court in the judgment dated 04.05.2020 in WP(C) 2149/2020, wherein, a conclusion was arrived that in the event an inadvertent mistake either due to oversight or because of callous attitude need not be penalized for the purpose. The said
conclusion was arrived at on the premises that no undue benefit would have been accrued to the assesse for having not mentioned the penalty that was earlier imposed to them.
In the circumstance, as agreed upon, by following the proposition laid down in the judgment dated 04.05.2020 in WP(C) 2149 of 2020, we require the petitioner assesse to file an application before the respondent No.3 being the Principal Commissioner, GST Guwahati and upon such application being filed, the Principal Commissioner to pass a reasoned order by taking note of all the proposition laid down in the judgment dated 04.05.2020 in WP(C) 2149/2020. Along with the application, the petitioner to also provide the Principal Commissioner with a copy of the said judgment.
The requirement of passing the reasoned order be completed within a period of three months from the date of receipt of the application of the petitioner.
Writ petition stands disposed of in the above terms.
JUDGE Comparing Assistant
Reproduced from the public record of the Gauhati High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.