In a classic case where the taxpayer has declared more tax than due under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS), the Bombay High Court has held that the benefit of the Amnesty Scheme cannot be denied merely on this basis.
The bench of Justice M.S. Sonak and Justice Jitendra Jain has observed that this is a case where the Petitioner had quantified the tax liability at Rs.1.21 Crores, and the department, upon finalisation and adjustment, found that the liability would come to Rs. 1.16 Crores or thereabouts, i.e less than the liability quantified by the Petitioner. This could hardly have been a valid ground to declare the petitioner ineligible to avail the benefits of the SVLDRS scheme.
The Petitioner/assessee has challenges the rejection of its Application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and the consequent orders including show cause notice, on various grounds, including inter-alia, non-consideration of CBIC Circular dated 27 August 2019, and the answers to the Frequently Asked Questions (FAQs), prepared by the Department
The Petitioner’s Application under the SVLDRS Scheme was rejected on the ground that the Petitioner was not found to be eligible. The SVLDRS Scheme indeed requires the quantification of the tax dues as on 30 June 2019. However, the CBIC Circular dated August 27, 2019, clarifies the position.
The record shows that the summons was issued to the Petitioner on 24 December 2018, pursuant to which a statement of the Petitioner’s Director was recorded on 04 January 2019. In his statement, the Petitioner’s Director clearly stated that the Petitioner had quantified the total short-paid liability of service tax as Rs. 120.16 lakhs. The Petitioner’s Director reiterated this position in his statement recorded on 17 March 2020. This material, if considered in the context of the CBIC Circular dated 27 August 2019 and the answers to FAQs prepared by the Department on 24 December 2019, makes it clear that there was a necessary quantification of the tax dues before the cut-off date of 30 June 2019, as contemplated by the scheme.
The court clarified that the Petitioner in the present case is in a better position because, after finalisation and adjustment, the department accepts the liability is less than what was quantified by the Petitioner.
The court quashed the rejection of the Petitioner’s Application under the SVLDRS Scheme on the ground of the Petitioner’s alleged ineligibility.
The court also directed that upon computation of the amount payable, if the Petitioner pays such amount within the period prescribed, together with the simple interest at the rate of 6% per annum, effective from 01 February 2020 till the date of payment, then the impugned show cause notice issued to the Petitioner will stand quashed. However, if the Petitioner does not pay such an amount and interest within the prescribed period, the Respondents would be at liberty to proceed with the show cause notice.
Case Details
Case Title: Kaarya Facilities & Services Ltd Versus Union of India
Case No.: WRIT PETITION NO. 1524 OF 2021
Date: 09 JUNE 2025
Counsel For Petitioner: Mr Akash Rebello
Counsel For Respondent: Mr Jitendra B. Mishra
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