Litigation category of Sabka Vishwas Scheme 2019 is Litigation and Sub Category of Appeal pending: Madras High Court

Litigation category of Sabka Vishwas Scheme 2019 is Litigation and Sub Category of Appeal pending: Madras High Court

Madras High Court: As per the ‘Litigation’ category of “Sabka Vishwas Scheme, 2019”, comes under the category of ‘Litigation’ and Sub Category of ‘Appeal pending’, the petitioner held to be eligible for a tax relief of 70%

Issue

Connected Writ Petitions were filed for issuance of Writ to call for the records of the first respondent relating to the issuance of the impugned form SVLDRS-3 dated 22.05.2020 and quash after considering the payments already made by the petitioner and issue a Discharge Certificate in form SVLDRS-4 in accordance with SVLDR Scheme 2019 within a time frame as may be fixed by this Court.

Facts:

• Writ petition pertains to ‘Sabka Vishwas Legacy Disputes Resolution Scheme’. The Petitioner submitted that SVLDRS was introduced vide Chapter V of the Finance Act, 2019 to settle disputes pending at various levels being disputed legacy tax levies and this is owing to the GST (Goods and Services Tax) regime kicking in on and from 01.07.2017.
• The writ petitioner comes under the category ‘Litigation’ as appeals were pending as on 30.06.2019. To be noted, this pertains to service tax.
• It was stated that the first Respondent i.e. designated committee issued SVLDRS-2 form to the petitioner on 04.02.2021 wherein the tax dues was mentioned as INR 29,94,239/-. It also shows that the amount already paid by the petitioner as INR 19,19,911/- but the balance has been shown as NIL.
• The Petitioners further submitted that in the form instead of showing tax relief under SVLDRS scheme as 70% of tax payable (INR 20,95,967/-) INR 10,74,328/- was mentioned. Writ petitioner took up the matter with the authorities concerned, in the interregnum, the writ petitioner’s appeal was disposed of and the matter is now remanded to the second respondent who is in seizin of the issue.
• The figure of INR 19,19,911/- being the tax paid by the writ petitioner has not been disputed and this is also reflected in the SVLDRS-3 form.
• Only with regard to actual tax relief, an error appears to have crept in. It was further submitted that this is more in the nature of an inadvertent technical/technological/secretarial error. Notwithstanding this SVLDRS-3 form has been erroneously issued saying there is a 30% tax balance.
• It was further submitted that if the above error is rectified, the writ petitioner will be entitled to a discharge certificate which this Court is informed is SVLDRS-4.

Observations and Findings:

• The Revenue Department, i.e. the Respondent filed a counter-affidavit before the Hon’ble Court admitting that, “the admissions made by the Petitioner appears to be correct. The case of the Petitioner, as per Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, comes under the category of ‘Litigation’ and Sub Category of ‘Appeal pending’. At the time of filing of an application under the scheme, the petitioner’s case was pending before Commissioner Appeal. Under this category, as the amount was below Rs. 50,00,000/-, the petitioner is eligible for tax relief of 70% and to pay a tax due of 30%. Further, it was submitted by the Respondent that while deciding the application filed under the SVLDR Scheme, any tax paid in cash or tax paid by utilizing the input credit, as pre-deposit or any other deposit during appellate proceedings, inquiry, investigation, or audit may be taken as the amount already paid. In this connection, a clear explanation is available in Circular No. 1071/4/2019-CX8 dated 27.08.2019 (Para 10(c)). The questionnaire, under ‘SVLDR Scheme (Q. No. 46) also clarifies that tax already paid through input credit may also be adjusted at the time of determination of the final amount payable under the scheme. In fine, a combined reading of the Circular and the questionnaire shows that, while coming to the aspect of tax already paid, the amount of tax paid by cash and the tax paid by way of adjustment through input tax credit has to be taken into consideration. If the said analogy is applied to the petitioner’s case, the petitioner has to pay no tax.“
• The aforesaid position by the respondents clarified the issue pertaining to the said petitions. As the respondents have made it clear that the writ petitioner’s case is correct and the petitioner need not have to pay tax which triggered captioned matter. There is no disputation or disagreement between both sides on this.

Held:

The captioned writ petition is allowed and the first respondent shall issue a discharge certificate as sought for in the prayer in the writ petition either manually or electronically within eight weeks from the day of judgement.

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