M/S. Huma Enterprises And Consultants PVT. LTD. vs. The Union Of INDIA And 3 Ors.

Held

The Court agreed with the submissions made by both parties that the present writ petition could be disposed of in line with the order passed in WP(C) No. 1808/2020. Consequently, the impugned rejection order dated 21.12.2019 was set aside. The matter was remanded back to the authorities to reconsider the application/declaration furnished by the petitioner. The authorities were directed to pass appropriate orders thereon in terms of the scheme and the rules framed thereunder. If the authorities required a fresh declaration, they were to permit the petitioner to file such a declaration afresh. The respondent authorities were directed to pass the required order on the application/declaration submitted by the writ petitioner within a period of two months from the date of receipt of the certified copy of the order.

Facts

The petitioner, M/s. Huma Enterprises and Consultants Pvt. Ltd., was issued a Show Cause Notice on 21.10.2011, leading to an Order-In-Original dated 26.03.2013, which confirmed a demand of Rs. 74,60,008/- in Service Tax, along with interest and penalties under Sections 78 and 77 of the Finance Act, 1994. The petitioner had already paid the confirmed demand and interest. An appeal was filed before the Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Kolkata, and a stay was granted on the recovery of penalties. Subsequently, the petitioner filed a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, declaring the duty/tax amount as Rs. 74,60,008/- and deposit of duty as the same amount, resulting in a payable amount of zero, as the scheme offered a waiver of interest and penalty. The petitioner's application was rejected by the Designated Committee on the grounds of an incorrect declaration for not showing the penalty amount.

Key Issues

1. Whether the rejection of the petitioner's declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, by the Designated Committee, on the ground that the penalty amount was not explicitly shown, is valid, particularly when the scheme provides for a waiver of penalties and interest? (Question of law and mixed fact and law, concerning the interpretation and application of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and its Rules). Petitioner's contentions: The petitioner argued that their application was in compliance with the scheme as it provided for a 100% waiver of interest and penalty, thus the payable amount was zero. They relied on the spirit of the scheme to resolve legacy disputes. They sought setting aside the rejection and an opportunity to be heard. Respondent's contentions: The respondent submitted that a similar writ petition (WP(C) No. 1808/2020) had been disposed of by a Co-ordinate Bench, remanding the matter back to the authorities.