Benefit Under SVLDRS Scheme Cant Be Denied Based On Dept. Decision To File Appeal: Jharkhand High Court

The Jharkhand High Court has held that the benefit under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS scheme), cannot be denied by the designated committee for the reason that the department has decided to file an appeal against the order.

The division bench of Acting Chief Justice Aparesh Kumar Singh and Justice Deepak Roshan has observed that the Designated Committee traveled beyond the purview of the Scheme and acted in a wholly illegal and arbitrary manner by denying the benefit of the Scheme to the petitioner. It appears that the benefit of the scheme has been extended from December 31, 2019, to January 15, 2020. Thus, a declarant was entitled to avail himself of the scheme up to January 15, 2020, and, admittedly, the petitioner filed its declaration in Form SVLDRS-1 before the expiration of the period.

The court noted that under Section 121(c) of Section 121(c) to be read with Clause 2(viii) of the Circular dated 12.12.2019, the case of the petitioner would fall under the "arrears category."

A demand-cum-show-cause notice was issued to the petitioner for the levy of service tax, including the cess. The order-in-original was passed, and the adjudicating authority confirmed the demand. Meanwhile, the Central Government launched the Sabka Vishwas (Legacy Dispute Resolution) Scheme, in 2019.

The government has extended the deadline to take advantage of the scheme's benefits from December 31, 2019, to January 15, 2020. The petitioner had undertaken not to prefer an appeal during the proceedings before the adjudicating authority, as has also been recorded in the order-in-original.

The petitioner filed a declaration in Form SVLDRS-1 under the categories of "arrears" and "tax dues less tax relief."

The petitioner was served with a notice in Form SVLDRS-2 by the designated committee that the respondent or department has taken a decision to file an appeal against the order-in-original. On that basis, the case of the petitioner falls under the "litigation category" and not the "arrears category." The petitioner duly replied, disagreeing with the notice in SVLDRS-2A.

On May 15, 2020, however, his declaration in Form SVLDRS-1 was rejected on the sole basis that the respondents had decided to file an appeal against the original order. Thus, the benefit of the scheme cannot be extended to the petitioner under the "arrears" category. The Department filed its appeal after the petitioner's declaration in form SVLDRS-1 was rejected.

The court held that the Designated Committee constituted under the SVLDRS was only required to verify the correctness of the declaration filed by the declarant and estimate the amount payable by such a declarant to avail himself of the benefits of the said scheme. Thus, the Designated Committee has not been vested with any jurisdiction to deny the benefit of the scheme to a declarant on the sole ground that the department has taken the step of filing an appeal against the order-in-original. The Designated Committee traveled beyond the purview of the Scheme and acted in a wholly illegal and arbitrary manner by denying the benefit of the Scheme to the petitioner.

Case Title: M/s Om Prakash Kashyap Versus UOI

Case No: W.P.(T) No. 1436 of 2020

Citation: 2023 LiveLaw (Jha) 2

Date: 04.01.2023

Counsel For Petitioner: Advocate Sumeet Gadodia, Ranjeet Kushwaha, Aakansha Mittal, Surbhi Agarwal

Counsel For Respondent: Advocate P.A.S. Pati

Click Here To Read The Order