M/S Hilton Hotel Management Services Private Limited vs. Union Of INDIA And Others

Facts

The petitioner, M/s Hilton Hotel Management Services Pvt. Ltd., filed a writ petition challenging a statement issued by the Designated Committee under the Sabka Vikas (Legacy Dispute Resolution) Scheme, 2019. The petitioner sought to adjust an amount of INR 1,32,27,955/- deposited as interest under protest against the amount payable under the scheme. The petitioner had declared an amount of Duty/Tax involved as Rs.21,93,02,883/- and claimed a pre-deposit of Rs.6,12,82,361/-. The Designated Committee, however, did not adjust the interest amount, stating that only the duty portion paid as pre-deposit could be adjusted. The petitioner relied on a previous High Court judgment in Schlumberger Solutions Pvt. Ltd vs. Commissioner, Central GST and others.

Held

The Court held that Section 124(2) of the Finance Act, 2019, is mandatory and requires the deduction of 'any amount paid' as a deposit during enquiry, investigation, or audit when issuing the statement indicating the amount payable by the declarant. The Court found that the provision does not differentiate between amounts paid under different heads (tax, interest, or penalty). Therefore, the view taken by the Designated Committee, which refused to adjust the interest amount, could not be sustained. The Court noted that the respondents had not filed any appeal against the judgment in Schlumberger Solutions Pvt. Ltd.'s case, which had attained finality. Consequently, the writ petition was allowed, and the impugned statement was quashed. The Designated Committee was directed to re-consider the petitioner's claim by adjusting the amounts paid towards interest and penalty in accordance with the law. The petitioner was directed to make the payment within four weeks from the date the Designated Committee issues the revised SVLDRS-3.

Key Issues

1. Whether the amount of INR 1,32,27,955/- deposited by the petitioner as interest under protest is adjustable against the amount payable under the Sabka Vikas (Legacy Dispute Resolution) Scheme, 2019, in light of Section 124(2) of the Finance Act, 2019? Petitioner's Arguments: The petitioner argued that Section 124(2) of the Finance Act, 2019, mandates the deduction of 'any amount paid' as a deposit during enquiry, investigation, or audit when issuing the statement of the amount payable under the scheme. They contended that this provision does not distinguish between amounts paid as tax, interest, or penalty, and therefore, the interest amount deposited should be adjusted. The petitioner relied on the Division Bench judgment of this Court in Schlumberger Solutions Pvt. Ltd. vs. Commissioner, Central GST and others. Respondents' Arguments: The respondents argued that there is no provision in the scheme for the adjustment of amounts paid specifically against interest. They contended that only the duty portion paid as pre-deposit can be adjusted from the duty amount calculated after relief under the scheme. The respondents' reply stated that the Designated Committee had rightly calculated the estimated amount payable.