Assessee Became Victim Of Lacuna In SVLDR Scheme Software: Bombay High Court Quashes Rejection Of Declaration

The Bombay High Court has quashed and set aside the rejection of the Petitioner’s declaration for SVLDRS-1.

The division bench of Justice Nitin Jamdar and Justice Abhay Ahuja has observed that the petitioner/assessee was a victim of the lacuna in the software governing the Sabka Vishwas (Legacy Dispute Resolution) (SVLDR) Scheme, 2019 where the Petitioner could not have selected the option of Navi Mumbai Commissionerate which was earlier Commissionerate of the petitioner.

The petitioner has supermarket outlets. The petitioner was duly registered to have Centralised Service Tax Registration. The Officers of the Directorate General of Central Excise Intelligence (DGCEI) visited the office of the petitioner at Navi Mumbai and seized various documents and records. The show cause notice was issued to the petitioner at the Navi Mumbai office in respect of service tax dues.

An Order Original was passed on 30 January 2019 by the Additional Commissioner, Central Goods and Service Tax (CGST), Navi Mumbai, where a demand for the tax was confirmed against the petitioner. The petitioner filed an Appeal before the Commissioner (Appeals), GST & Central Excise, Raigarh, in respect of the confirmed demand of service tax under reverse charge.

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 was introduced by the Government through the Finance Act of 2019 for the settlement of legacy disputes. There are various categories of persons through which a person can file a declaration to avail of the benefit of the Scheme. The petitioner filed a declaration under SVLDRS-1 on 1 October 2019.

The Petitioner’s form was not accepted with a remark “the Order in Original which is pending before the Commissioner Appeals pertains to Navi Mumbai Commissionerate. Assessee has been advised to apply accordingly. Hence the application is rejected”.

The petitioner submitted that with effect from 29 September 2016, the petitioner had duly changed its Centralised Service Tax Registration Certificate with an application filed under Form ST-2 and had changed the corporate address to Thane Corporate Office.

The petitioner submitted that the jurisdictional Commissionerate of the Petitioner was also shifted from Navi Mumbai Commissionerate to Range-I, Division-VI, Thane. When the Petitioner was filing a declaration on the portal in SVLDRS-1, there was no option to change the Commissionerate as once the Petitioner had entered the registration number, it automatically showed the concerned Commissionerate as Thane Commissionerate and it was not possible for the Petitioner to change the option to Navi Mumbai. It was not possible for the Petitioner to log in to select Navi Mumbai Commissionerate using the registration number which was connected with Thane Commissionerate.

The petitioner contended that in view of this technical lacuna, the Petitioner’s application was rejected and the Respondents ought to have redirected the application of the Petitioner to the correct Commissionerate.

The respondent contended that the petitioner was informed that the Petitioner had chosen an incorrect Commissionerate as he had to select Navi Mumbai Commissionerate since the pending appeal arose from Order in Original in Navi Mumbai Commissionerate. The petitioner was informed on 6 December 2019 and had forty-one days till 14 January 2020 to correct the Commissionerate to Navi Mumbai, which the Petitioner failed to do. Therefore, the petitioner is himself to be blamed for losing the benefit of the scheme.

The court observed that the scheme of 2019 which is brought into force by the Finance Act of 2019 is for the settlement of legacy disputes and also gives the opportunity to the taxpayer to come forward to make payments and to resolve their pending disputes. It was also to help the Government to clear the amount locked in litigation to augment the revenue.

The court ruled that the Petitioner is entitled to get his application or declaration SVLDRS-1 to be examined on merits as to whether the Petitioner is otherwise entitled to the benefit of the scheme.

Case Title: Avenue Supermarkets Ltd. Versus The Union of India

Case No: Writ Petition No. 4969 Of 2022

Citation: 2023 LiveLaw (Bom) 161

Date: 17/03/2023

Counsel For Petitioner: Dharnendra Kumar Rana a/w. Mr. Shreyas Jain

Counsel For Respondent: Pradeep S. Jetly

Click Here To Read The Order