M/S Balaji Construction Company vs. Union Of INDIA And 3 Others

Held

The Court allowed the writ petition, holding that the controversy was squarely covered by an earlier decision of a co-ordinate bench in M/s Magma Industries Limited Vs. Designated Committee Office of Commissioner Central Goods and Service Tax in Writ Tax No.110 of 2021, decided on September 7, 2021. The revenue's counsel stated that this earlier order had attained finality. The Court found no reason to differ with the view taken in the Magma Industries case. The operative direction was to allow the declaration to be accepted and ensure compliance within three months. The specific reasoning of the Magma Industries case, which the present judgment adopted, is not detailed in this judgment, but it pertained to the eligibility criteria for the Sabka Vishwas Scheme.

Facts

The petitioner, M/s Balaji Construction Company, filed a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The Designated Committee, respondent no. 2, rejected this declaration via an Order-in-Original dated May 5, 2020. The reason for rejection was that the amount declared by the petitioner during search proceedings could not be considered for the computation of the "quantified" amount. The petitioner sought a writ of mandamus to accept their declaration. The revenue contended that since no show cause notice was issued and no opinion was formed by the authorities regarding the evaded/avoided service tax amount before the cut-off date of June 30, 2019, the petitioner was not eligible to file a declaration.

Key Issues

1. Whether the amount declared by the petitioner during search proceedings can be considered for the computation of the "quantified" amount for the purposes of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, under Section 125 of the Finance (No. 2) Act, 2019? Petitioner's contention: The petitioner argued that their declaration should be accepted. The judgment does not explicitly detail the petitioner's arguments beyond seeking acceptance of their declaration, but it implies they believed their declared amount was eligible. Revenue's contention: The revenue argued that the petitioner was not eligible to file a declaration because no show cause notice had been issued and no opinion had been formed by the revenue authorities as to the amount of service tax evaded/avoided before the cut-off date of June 30, 2019. This implies the revenue's position was that the declared amount was not a "quantified" amount in the statutory sense.