SVLDR Scheme Can't Be Invoked For Fresh SCN Issued After Deadline Even If Arising From Same Dispute: Delhi High Court
The Delhi High Court dismissed a retail business' plea seeking benefit of government's tax amnesty scheme for a second show cause notice issued to it post the cut-off date, in pursuance of the first SCN.A division bench of Justices Prathiba M. Singh and Shail Jain clarified that mere reference to earlier SCN doesn't make subsequent SCN eligible under Sabka Vikas Legacy Dispute Resolution...
The Delhi High Court dismissed a retail business' plea seeking benefit of government's tax amnesty scheme for a second show cause notice issued to it post the cut-off date, in pursuance of the first SCN.
A division bench of Justices Prathiba M. Singh and Shail Jain clarified that mere reference to earlier SCN doesn't make subsequent SCN eligible under Sabka Vikas Legacy Dispute Resolution Scheme (SVLDR Scheme). It observed,
“The mere fact that the SCN-II makes a reference to SCN-I would not mean that the Petitioner would get a chance to apply under the SVLDR Scheme with respect to SCN-II as well, when admittedly SCN-II was issued subsequent to the SVLDR Scheme being launched and subsequent to the deadline which is mentioned in the Scheme. Further, the fact that SCN- I is one of the relied upon documents in SCN- II would also not help the Petitioner's case either.”
Petitioner had challenged an order of the Designated Committee under the Scheme, rejecting its application with regard to SCN-II.
Briefly put, SCN-I was issued to the Petitioner on 18th October, 2018 raising demand of ₹33,64,946/- service tax on the premise that the services rendered by the Petitioner do not qualify as 'export of services'.
Meanwhile, the Government announced the SVLDR Scheme on 1 st September, 2019. The demand in SCN-I came to be significantly reduced under this scheme.
In the meantime, a second SCN was issued on 19th December, 2019 raising demand of Rs. 46,86,276/-.
The Petitioner then filed another application under the SVLDR Scheme with regard to SCN-II. This was, however, rejected by the impugned order on the ground that SCN was issued beyond the stipulated date (30th June, 2019) prescribed in the Scheme.
Petitioner argued that the rejection is incorrect inasmuch as SCN-II was merely a continuation of SCN-I itself. It was further contended that Petitioner cannot be deprived of the benefit of the SVLDR Scheme merely because the Department chose to divide the issue into two SCNs.
The High Court was however of the view that SCN-II is not to be considered as a continuation of SCN-I or the refund proceedings.
“SCN-II stood on its own legs, as the demand was quantified in SCN-II resulting in the adjudication order dated 30th June, 2023. The rejection of the application pertaining to SCN-II under the SVLDR Scheme cannot, therefore, be faulted as the SCNII itself was issued post the due date,” it said.
The Court added, “the SCNs issued beyond the deadline prescribed in the Scheme itself cannot be considered for benefits under the Scheme,” and dismissed the plea.
Appearance: Mr. Sunil Agarwal, Mr. Utkarsh Tiwari, Mr. Anurag Dwivedi, Mr. Ashutosh Mohan Rastogi, Advs. for Petitioner; Mr. Aditya Singla, SSC CBIC with Ms. Arya Suresh Nair, Mr. Dhananjay Gautam & Mr. Akhil Sharma, Advs. for Respondents
Case title: Varner Retail Services South Asia Pvt. Ltd. v. Assistant Commissioner Division - Okhla, Central Goods And Service Tax (Delhi South) & Ors.
Case no.: W.P.(C) 12049/2023