Patanjali Ayurved LTD. vs. Commissioner Of Central Excise And Service Tax Dehradun

Facts

Patanjali Ayurved Ltd. (petitioner) filed a writ petition challenging Form SVLDRS No. 3 dated 05.03.2020 issued by the Commissioner of Central Excise & Service Tax (respondent). The petitioner sought to quash this form and direct the respondent to issue a fresh form, adjusting an amount of Rs. 3,19,69,680/- already deposited. Alternatively, they prayed for a refund of this amount with interest. The core issue revolved around whether the amount paid by the petitioner under protest towards interest, prior to the issuance of a show cause notice, should be considered as a pre-deposit for the purpose of their application under the 'Sabka Vikas (Legacy Dispute Resolution) Scheme, 2019'. The respondent raised a technical issue regarding the expiry of the auto-populated forms.

Held

The Court held that the amount paid by the petitioner towards interest should be considered as a pre-deposit and adjusted while disposing of their application under the 'Sabka Vikas (Legacy Dispute Resolution) Scheme, 2019'. The Court found the reasoning of the Punjab and Haryana High Court in Schlumberger Solutions Pvt. Ltd. to be in line with Section 124(2) of the Finance Act, 2019. Section 124(2) mandates the deduction of any amount paid as pre-deposit at any stage of appellate proceedings or as a deposit during enquiry, investigation, or audit, without making a distinction based on the head of payment (tax, interest, or penalty). The Court considered Section 124 of the Finance Act, 2019, as a benevolent provision aimed at amicably resolving disputes and achieving the objects of the beneficial scheme. Therefore, the Court decided to overlook the technical issue of the expired auto-populated form. The Court quashed the impugned Form SVLDRS-3 and directed the Designated Committee to reconsider the petitioner's claim, adjusting the Rs. 3,19,69,680/- paid towards interest. The petitioner was directed to make any further payments within three weeks of the Designated Committee issuing the revised Form SVLDRS-3.

Key Issues

1. Whether the amount paid by the petitioner, under protest, towards interest, prior to the issuance of a show cause notice, shall be considered as pre-deposit while disposing of their application for waiver under the 'Sabka Vikas (Legacy Dispute Resolution) Scheme, 2019', which was issued under Section 24 of the Finance Act, 2019? Petitioner's contention: The petitioner argued that the amount paid towards interest should be considered as a pre-deposit. They relied on the Punjab and Haryana High Court's decision in Schlumberger Solutions Pvt. Ltd. vs. Commissioner Central GST & Ors., which held that any amount paid during enquiry, investigation, or audit should be deducted when issuing the statement indicating the amount payable, irrespective of the head under which it was paid. They noted that no Special Leave Petition was filed against this order by the Central GST Department. Respondent's contention: The respondent argued that there were technical issues as the auto-populated forms (Form 1, 2, and 3) had a lifespan of 30 days, and by the time a stay order was granted, this period had expired, preventing the requested relief. They did not dispute that the scheme's deadline was extended.