M/S. Pkm Electors vs. The Union Of INDIA And 3 Ors.

Held

The Court agreed with the submission of the respondents that a similar writ petition had been disposed of by a co-ordinate bench by remanding the matter back to the authorities. The petitioner also agreed to this approach. Consequently, the Court set aside the impugned rejection order dated 21.12.2019 and remanded the matter back to the authorities to reconsider the petitioner's declaration (ARN No. LD1912190002101 dated 19.12.2019). The authorities were directed to pass appropriate orders in terms of the scheme and its rules. If a fresh declaration was required, the petitioner was to be permitted to file one. The respondent authorities were directed to pass the required order within two months from the receipt of the certified copy of the order.

Facts

The petitioner, M/s. PKM Electors, was issued a Show Cause Notice in 2012 for alleged non-compliance with the Finance Act, 1994, leading to a demand of Rs. 2,85,51,936/- for the period 2007-08 to 2011-12, along with penalties. An Order-In-Original confirmed this demand and imposed penalties. An appeal to the CESTAT, Kolkata, resulted in a direction to deposit Rs. 5,00,000/-, which was paid. Subsequently, a de-novo proceeding led to a fresh Order-In-Original dated 30.03.2017, demanding Rs. 2,30,63,837/- as service tax and an equal amount as penalty. The petitioner filed another appeal before the CESTAT, which was pending. The petitioner then filed a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, declaring Rs. 2,30,63,837/- as duty and Rs. 1,23,86,923/- as deposit, resulting in a payable amount of zero. This application was rejected by the Designated Committee for not mentioning 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 was arbitrary and violative of the scheme's rules? The petitioner argued that the rejection was incorrect as the scheme provided for a waiver of penalty and interest, and the declaration was made in good faith. The petitioner sought an opportunity to be heard. The respondents submitted that a co-ordinate bench had disposed of a similar writ petition by remanding the matter back to the authorities. The petitioner agreed to this course of action.