M/S.Gt Holidays Private Limited vs. The Designated Committee

Facts

M/s. GT Holidays Private Limited (the petitioner) was under investigation for service tax liability for the period 2014-15 to June 2017. The petitioner declared a liability of Rs. 1,05,91,153/-. Subsequently, the petitioner applied under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The Designated Committee initially determined the petitioner's liability at Rs. 45,15,342.50, which was later revised to Rs. 46,13,205.50. The petitioner paid this amount. However, the Designated Committee later issued an order on May 15, 2020, rejecting the petitioner's declaration, stating they were not eligible for the scheme. The petitioner challenged this order seeking its quashing and a direction to issue a discharge certificate.

Held

The Court held that the Designated Committee did not have the jurisdiction to issue the impugned order. The Court reasoned that Section 128 of the Act and Rule 6(6) of the Scheme Rules clearly limit the Designated Committee's power to modify its order only to correct arithmetical or clerical errors apparent on the face of the record, within thirty days of issuing Form SVLDRS-3. The Designated Committee cannot revisit the issue on merits after having made a determination under Section 127(4) and issuing Form SVLDRS-3. Therefore, the impugned order, which sought to reject the declaration on merits after moving to the next stage, was beyond the committee's statutory power. The Court also found the order vulnerable on the ground of violation of principles of natural justice, as the petitioner was not put on notice before the rejection. However, the Court did not remit the matter for rehearing due to the lack of jurisdiction. The Court clarified that it had only held that the committee lacked jurisdiction to reject the declaration after issuing Form SVLDRS-3 and had not adjudicated on the petitioner's eligibility. The Court directed the Designated Committee to issue the Discharge Certificate within thirty days, while leaving it open for the department to file a fresh writ petition to question the eligibility or the discharge certificate if they believed it was vitiated by fraud or illegality.

Key Issues

1. Whether the Designated Committee had the jurisdiction to reject the petitioner's declaration after issuing Form SVLDRS-3 and accepting payment, thereby revisiting the determination on merits? 2. Whether the impugned order is liable to be quashed on the ground of violation of principles of natural justice? Petitioner's arguments: The petitioner contended that the impugned order was passed without jurisdiction. They argued that once the Designated Committee had determined the liability, accepted payment, and moved towards issuing a discharge certificate, it could not revisit the decision on merits. They also argued that they were not put on notice before the rejection order was passed, violating principles of natural justice. Respondents' arguments: The respondents argued that the petitioner was not eligible to apply under the scheme as they were under investigation by the Directorate General of GST Intelligence, and the amount of duty involved was not quantified on or before June 30, 2019, as required by Section 125(1)(e) of the Finance (No.2) Act, 2019. They relied on the decision in Chaqu Jour HR Services Pvt. Ltd. Vs. Union of India.