Dinesh Kalway vs. Union Of INDIA

Held

The Court held that provisions concerning concessions or relaxations in taxing statutes, where there is doubt, should be resolved in favour of the Revenue. This principle, supported by decisions in Union of India vs. Wood Papers Ltd. and Novopan India Ltd., Hyderabad, was applied to Section 128 of the Finance Act, 2019, which is part of a scheme offering concessions. The Court further held that a statutory provision prescribing a time limit for performing a duty, without stipulating consequences for failure, is not mandatory. Therefore, the 30-day period for reviewing the statement under Section 128 is relaxable if reasonable grounds are assigned. The Court found that the modification was exercised in public interest to avoid a loss of Rs. 17,74,472.20 to the public exchequer due to the oversight in not including CENVAT Credit of Rs. 23,52,892/-. The reason for the delayed review was not arbitrary and did not violate Article 14 of the Constitution. Consequently, the action of the Revenue was upheld.

Facts

The petitioner, M/s Balaji Marketing, sought resolution of tax disputes under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. On January 16, 2020, the Designated Committee issued a statement under Section 127, declaring the reduced tax payable as Rs. 8,97,037.20, based on total tax dues of Rs. 29,90,124.00 for the period April 1, 2016, to June 1, 2017. The petitioner paid this amount on February 15, 2020. Subsequently, the Revenue noticed that CENVAT Credit of Rs. 23,52,894/-, proposed to be disallowed and reversed in a show cause notice dated March 18, 2019, was not included in the "tax dues" calculation. Consequently, the Revenue issued a rectified SVLDRS Form-3 on February 28, 2020, estimating modified tax dues at Rs. 53,43,018/- and a reduced tax payable of Rs. 26,71,509/-. As the petitioner did not pay this revised amount, recovery proceedings were initiated, leading to the present writ petition challenging the modification after the initial statement and payment.

Key Issues

1. Whether the Designated Committee, under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, can exercise its power under Section 128 of the Finance Act, 2019, to suo motu modify an issued statement after the expiry of 30 days from its issuance, upon discovering an arithmetical/clerical mistake, particularly when the Scheme is a concession. Petitioner's Contention: The petitioner argued that once the statement was issued and the reduced amount was paid, the Designated Committee could not modify it after 30 days, as Section 128 of the Finance Act, 2019, and Rule 6(6) of the SVLDRS Scheme, 2019, governed the process. They likely contended that the modification was beyond the stipulated time and authority. Revenue's Contention: The Revenue contended that provisions concerning concessions in taxing statutes should be interpreted in favour of the Revenue in case of doubt. They also argued that a time period prescribed for performing a duty, without a specific consequence for failure, is not mandatory. The modification was necessary to prevent a loss to the public exchequer due to an oversight in calculating the tax dues.