Gujarat High Court
Vijay Travels vs Union Of India on 8 January, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/26730/2022 JUDGMENT DATED: 08/01/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 26730 of 2022
With
R/SPECIAL CIVIL APPLICATION NO. 26921 of 2022
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE D.N.RAY
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Approved for Reporting Yes No
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VIJAY TRAVELS
Versus
UNION OF INDIA & ORS.
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Appearance:
MR DEVEN PARIKH SENIOR ADVOCATE WITH MR NIRAV P SHAH(6475)
for the Petitioner(s) No. 1
MR PY DIVYESHWAR for the Respondent(s) No. 1,2,3,4
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR.JUSTICE D.N.RAY
Date : 08/01/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)
1. Heard learned Senior Advocate Mr. Deven Parikh with learned advocate Mr. Nirav Shah Page 1 of 21 Uploaded by RAGHUNATH R NAIR(HC00196) on Mon Jan 20 2025 Downloaded on : Fri Jan 31 23:30:51 IST 2025 NEUTRAL CITATION C/SCA/26730/2022 JUDGMENT DATED: 08/01/2025 undefined for the petitioner and learned advocate Mr. P.Y. Divyeshwar for the respondents.
2. Since the issues involved in both these petitions are identical, the matters have been heard together and would be disposed of by this common judgment.
3. Rule returnable forthwith. Learned advocate Mr. P.Y. Divyeshwar waives service of notice of rule on behalf of the respondents.
4. For the sake of convenience, the facts are recorded from Special Civil Application No. 26730 of 2022.
5. By way of this petition under Article 226 of the Constitution of India, the petitioner has prayed for a direction to CGST and Central Excise Authorities to accept the declared amount manually as per the statements issued in Form SVLDRS-3 and further for a direction Page 2 of 21 Uploaded by RAGHUNATH R NAIR(HC00196) on Mon Jan 20 2025 Downloaded on : Fri Jan 31 23:30:51 IST 2025 NEUTRAL CITATION C/SCA/26730/2022 JUDGMENT DATED: 08/01/2025 undefined to issue Discharge Certificate in Form SVLDRS-4 upon manual payment of declared amount.
6. Brief facts of the case are that the petitioner is a proprietory concern engaged in the business of providing rent a cab service.
7. It is the case of the petitioner that the petitioner was under bona fide belief that the service provided by the petitioners is not taxable and hence had not been paying service tax. The department after conducting inquiry had issued various show cause notices demanding service tax from the petitioner.
8. It is the case of the petitioner that the petitioner was eligible to make a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 to settle the Page 3 of 21 Uploaded by RAGHUNATH R NAIR(HC00196) on Mon Jan 20 2025 Downloaded on : Fri Jan 31 23:30:51 IST 2025 NEUTRAL CITATION C/SCA/26730/2022 JUDGMENT DATED: 08/01/2025 undefined disputes and therefore, the petitioner opted for the scheme to settle the long pending dispute, for which the petitioner filed four declarations under section 125 of the Finance Act, 1994 (For short "the Act") separately for each notice under Form SVLDRS-1 on departmental portal.
9. The declaration was considered by the Designated Committee as provided under section 126 of the Act and a statement as provided under section 127 of the Act was issued online in Form SVLDRS-3 in each case.
10.Due to Covid lockdown, the last date for payment of amount under the Dispute Resolution Scheme was extended upto 30.06.2020 by instruction dated 29.05.2020.
11.It is the case of the petitioner that as per the procedure prescribed under the Scheme, Page 4 of 21 Uploaded by RAGHUNATH R NAIR(HC00196) on Mon Jan 20 2025 Downloaded on : Fri Jan 31 23:30:51 IST 2025 NEUTRAL CITATION C/SCA/26730/2022 JUDGMENT DATED: 08/01/2025 undefined upon issuance of statement in SVLDRS-3, challan for payment of amount is to be generated online on the departmental portal, however, in case of the petitioner the challans for payment could not be generated on the protal due to technical reason. As the last date was nearing, the petitioner had approached the jurisdictional departmental authority various times to help in generating the challans for payment. The Range authority had also instructed the petitioner to make payment by email dated 19th June, 2020.
12.Upon receipt of the email, the petitioner through its reply dated 19th June, 2020 replied that the portal is still not accepting online payment.
13.It is the case of the petitioner that to comply with the payment of amount before the last date, the petitioner tried to make Page 5 of 21 Uploaded by RAGHUNATH R NAIR(HC00196) on Mon Jan 20 2025 Downloaded on : Fri Jan 31 23:30:51 IST 2025 NEUTRAL CITATION C/SCA/26730/2022 JUDGMENT DATED: 08/01/2025 undefined payment through RTGS on 29.06.2020 to the RBI account. The amount was debited from his account and on the same day, the amount was re-credited in the petitioner's account.
14.As the extended last date for payment was 30.06.2020, the petitioner approached the department by email dated 30.06.2020 to allow them to make payment by demand draft for discharging liability under SVLDRS. As nothing was forthcoming from the department, the petitioner again addressed various department authorities vide email dated 18.09.2020 and requested the authority to allow payment manually by service tax challan.
15.It is the case of the petitioner that in the meanwhile, the proprietor Karta of HUF Shri Haresh Trivedi expired on 22.04.2021 due to Covid.
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16.Thereafter the adjudicating authority had fixed personal hearing vide letter dated 13.07.2021 in one pending show cause notice dated 04.04.2018 wherein SVLDRS declaration was filed and statement in Form SVLDRS-3 was issued. Thereafter, the petitioner had appointed new Consultant/Chartered Accountants who informed the department that they need some time as they are recently engaged and requested for accommodation in the matter. The Chartered Accountant also addressed letter dated 26.07.2021 to the adjudicating authority reiterating the request.
17.On 08.12.2021, the Chartered Accountant again addressed the adjudicating authority in detail regarding applications filed under SVLDRS and informed the department that they do not have login credentials and therefore, Page 7 of 21 Uploaded by RAGHUNATH R NAIR(HC00196) on Mon Jan 20 2025 Downloaded on : Fri Jan 31 23:30:51 IST 2025 NEUTRAL CITATION C/SCA/26730/2022 JUDGMENT DATED: 08/01/2025 undefined they are unable to fetch correct details from the portal. It was also informed that they could not make the payment online due to technical difficulty on the portal.
18.The adjudicating authority again fixed the matter for hearing on 28.12.2021 vide letter dated 22.12.2021. It is the case of the petitioner that said letter was received by the petitioner on 29.12.2021 and therefore, vide letter dated 30.12.2021 the petitioner again requested for granting fresh hearing and also requested to consider the reply dated 8.12.2021.
19.It is the case of the petitioner that no further hearing was granted and order in original dated 16.02.2022 was passed ex-parte without considering the representations of the petitioner.
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20.Being aggrieved by the aforesaid decision, the petitioner has approached this Court.
21.Learned Senior Advocate Mr. Deven Parikh for the petitioner submitted that the petitioner had tried to make payment in the RBI account which was also debited from their account, however due to technical reasons, not known to the petitioner, the same was re-credited. Hence the petitioner bona fidely made all efforts to make good the payment and settle the dispute, however the same could not be done due to technical reasons. It was therefore, submitted that the intended benefit under the SVLDRS is required to be granted to the petitioner.
22.It was further submitted that the Scheme is introduced to allow the defaulter to pay the amount and to settle the disputes arisen under the ertswhile Central Excise and Page 9 of 21 Uploaded by RAGHUNATH R NAIR(HC00196) on Mon Jan 20 2025 Downloaded on : Fri Jan 31 23:30:51 IST 2025 NEUTRAL CITATION C/SCA/26730/2022 JUDGMENT DATED: 08/01/2025 undefined Service Tax regime. The petitioner had correctly filed the declaration form which was accepted by the Designated Committee and statement for payment as provided under section 127(1) of the SVLDRS was issued and there was no difference in the declared liability and accepted liability.
23.It was further submitted that upon issuance of Form SVLDRS-3, the petitioner was required to generate challan on the portal, however, the same could not be generated due to technical glitch which fact was brought to the notice of the jurisdictional Range Superintended before the last date, however the said glitch could not be rectified. The petitioner also made attempt to make payment on 29.06.2020 and the amount was debited from his account, however the same was re-credited into his account. Such fact was brought to the notice of the department on 30.06.2020 Page 10 of 21 Uploaded by RAGHUNATH R NAIR(HC00196) on Mon Jan 20 2025 Downloaded on : Fri Jan 31 23:30:51 IST 2025 NEUTRAL CITATION C/SCA/26730/2022 JUDGMENT DATED: 08/01/2025 undefined and the petitioner also requested to allow them to make payment by demand draft which was not allowed.
24.It was further submitted that the Government has introduced this one time measure for liquidation of past disputes of Central Excise and Service Tax. The basic aim of the scheme is to settle the pending litigation pertaining to service tax and excise duty and therefore, the petitioner ought to have been permitted to deposit declared amount manually instead of taking hyper technical approach.
25.It was further submitted that even after the last date, huge amount from various declarants was pending as per the data of the Board and therefore, the Board had issued directions to Zonal Officers vide instruction dated 14.07.2020 whereby Zonal Commissioners were directed to contact the declarants who Page 11 of 21 Uploaded by RAGHUNATH R NAIR(HC00196) on Mon Jan 20 2025 Downloaded on : Fri Jan 31 23:30:51 IST 2025 NEUTRAL CITATION C/SCA/26730/2022 JUDGMENT DATED: 08/01/2025 undefined could not pay amount declared due to any difficulty and likely to pay in future. It was submitted that the departmental authority had failed to follow the aforesaid instruction and therefore, the petitioner may be permitted to pay amount manually.
26.It was further submitted that the Department had further issued instruction dated 17.03.2021 by which they have directed the Designated Authority to manually process declaration in cases where the High Courts have directed to do so.
27.It was further submitted that petitioner was ready and willing to pay the interest at appropriate rate after the last date of payment and therefore, the petitioner may be allowed to make payment under the SVLDRS and further be allowed to settle the disputes in true spirit of SVLDRS.
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28.On the other hand, learned advocate Mr. P.Y. Divyeshwar for the respondents submitted that the petitioner had provided services falling under the category of rent a cab scheme operator. An inquiry was conducted by the department which revealed that the petitioner had provided the services without payment of service tax. As per the provisions of the Finance Act, 1994 and the Rules, the service provider was required to assess correct value of services provided and to pay applicable service tax on that value. It was submitted that even though the petitioner had knowledge of correct taxable value, they had not discharged their service tax liability in their ST-3 returns and they had deliberately suppressed the correct taxable value and thus not paid the correct service tax leviable on the taxable value of service provided/received with a view to evade Page 13 of 21 Uploaded by RAGHUNATH R NAIR(HC00196) on Mon Jan 20 2025 Downloaded on : Fri Jan 31 23:30:51 IST 2025 NEUTRAL CITATION C/SCA/26730/2022 JUDGMENT DATED: 08/01/2025 undefined payment of service tax.
29.It was submitted that several show cause notices were issued to the petitioner for demand of applicable service tax along with interest which were later adjudicated and total demand of service tax liability confirmed against the petitioner was Rs. 47.85 lakh along with applicable interest and penalty. Thereafter several letters were addressed to the petitioner by the Range Officers of the department, however, the petitioner informed that they had preferred an appeal against the said orders before Commissioner (Appeals) which appeal was dismissed as the petitioner failed to pay the pre-deposit amount of 25% of the service tax confirmed.
30.It was further submitted that a designated committee as per SVLDRS had issued Form Page 14 of 21 Uploaded by RAGHUNATH R NAIR(HC00196) on Mon Jan 20 2025 Downloaded on : Fri Jan 31 23:30:51 IST 2025 NEUTRAL CITATION C/SCA/26730/2022 JUDGMENT DATED: 08/01/2025 undefined SVLDRS-3 on 21.02.2020 and 29.02.2020 that determined amount to be payable by the petitioner. The petitioner had to pay the amount payable as per Form SVLDRS-3 within a period of 30 days from the issuance of SVLDRS-3. However, due to covid-19 pandemic, the last date for payment under SVLDRS was extended upto 30.06.2020 vide instruction dated 29.05.2020. The department had also requested the petitioner to pay the taxes/amount as determined under Form SVLDRS-
3. However, the petitioner failed to make payment. It was submitted that the petitioner chose to make payment only on the last date though considerable time was available with the petitioner. It was submitted that the petitioner did make an attempt to make the payment through RTGS on 29.06.2020, however same could not materialise.
31.It was further submitted that as per the Page 15 of 21 Uploaded by RAGHUNATH R NAIR(HC00196) on Mon Jan 20 2025 Downloaded on : Fri Jan 31 23:30:51 IST 2025 NEUTRAL CITATION C/SCA/26730/2022 JUDGMENT DATED: 08/01/2025 undefined report of the ICEGATE portal on 30.06.2020, between 04:00 pm to 11:59 pm, 239 transactions were initiated and 1378 RBI payment intimations were also received. Thus, the ICEGATE portal was functioning properly and no technical glitch was reported. Therefore, the contention of the petitioner that he tried to make payment but due to technical glitch same could not be done is without merits.
32. It was further submitted that a Tax Payers Manual for SVLDR Scheme, 2019 had been placed on the CBIC website wherein the manner of generation of challan and payment methods were explained with screenshots. As per the instructions in the said manual, after generation of the challan, the petitioner was required to generate the mandate form and proceed to make payment through NEFT/RTGS. Since the working process under the scheme Page 16 of 21 Uploaded by RAGHUNATH R NAIR(HC00196) on Mon Jan 20 2025 Downloaded on : Fri Jan 31 23:30:51 IST 2025 NEUTRAL CITATION C/SCA/26730/2022 JUDGMENT DATED: 08/01/2025 undefined was automated, any technical issues were to be communicated by email to the CBIC Mitra helpdesk. However, the petitioner has failed to make such email communication with the CBIC Mitra Helpdesk regarding the issue.
33.It was further submitted that the entire working process under the SVLDRS was automated and therefore, manual payment under SVLDRS is not acceptable as per the provisions of the SVLDRS. It was therefore, submitted that the petitions lack merit and therefore, the same may be dismissed.
34.Having considered the submissions made by learned advocate for the respective parties, it is not in dispute that the petitioner was required to make the payment as determined in Form SVLDRS-3 and the petitioner tried to make the payment through RTGS on 29.06.2020, however, the same was not accepted by the Page 17 of 21 Uploaded by RAGHUNATH R NAIR(HC00196) on Mon Jan 20 2025 Downloaded on : Fri Jan 31 23:30:51 IST 2025 NEUTRAL CITATION C/SCA/26730/2022 JUDGMENT DATED: 08/01/2025 undefined receiving bank and the payment was returned to the petitioner which is apparent from the bank statement produced on record.
35.It also appears from the record that the petitioner could not generate the challan successfully for making the payment and after the advice of its Chartered Accountant, tried making payment through NEFT/RTGS out of abundance caution and to demonstrate the bona fide of the petitioner to make the payment as determined under the Scheme by respondent No.2 Designated Committee. In view of the bona fide attempt made by the petitioner to make the payment cannot be doubted and therefore, the substantive benefit of the Scheme cannot be denied to the petitioner on the ground of procedural technicalities more particularly, in time of Covid-19 Pandemic. Page 18 of 21 Uploaded by RAGHUNATH R NAIR(HC00196) on Mon Jan 20 2025 Downloaded on : Fri Jan 31 23:30:51 IST 2025
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36.The basic object of the Scheme is to reduce litigation by allowing the eligible assessee to make the payment of the outstanding dues after availing the relief under the Scheme. As per the provisions of the Scheme, respondent No.2 has issued a statement as provided under section 127 of Chapter-V of the Finance Act (No.02) 2019 determining the amount payable by the petitioner under the Scheme. Therefore, in the given facts and circumstances, the petitioner made bona fide attempt to make the payment as determined under the Scheme and is also prepared to pay the amount in question in accordance with the Scheme along with interest for the period for which the petitioner was not permitted to make payment by respondent authorities considering extreme Pandemic condition of Covid-19, we are of the opinion that this is a fit case for invocation of the powers under Page 19 of 21 Uploaded by RAGHUNATH R NAIR(HC00196) on Mon Jan 20 2025 Downloaded on : Fri Jan 31 23:30:51 IST 2025 NEUTRAL CITATION C/SCA/26730/2022 JUDGMENT DATED: 08/01/2025 undefined Article 226 of the Constitution of India.
37.This Court in similar circumstances in case of M/s. L G Chaudhary v. Union of India (judgment dated 14.10.2022 rendered in Special Civil Application No.12366 of 2021) allowed the petition by directing the respondent authorities to accept the payment as specified in SVLDRS-3 along with interest and grant the benefit of SVLDRS to the petitioner therein.
38.In view of the above, these petitions are allowed and the respondent authorities are directed to accept the payment as specified in SVLDRS-3 along with interest @ 9% per annum from 30.06.2020 till the date of payment and grant the benefit of the Scheme to the petitioner. The petitioner shall deposit the said amount with interest on or before 09.02.2025. As a consequence, Page 20 of 21 Uploaded by RAGHUNATH R NAIR(HC00196) on Mon Jan 20 2025 Downloaded on : Fri Jan 31 23:30:51 IST 2025 NEUTRAL CITATION C/SCA/26730/2022 JUDGMENT DATED: 08/01/2025 undefined the impugned order-in-original dated 16.02.2022 passed by respondent No.4 is quashed and set aside so as to grant benefit of the Scheme to the petitioner. Rule is made absolute to the aforesaid extent.
(BHARGAV D. KARIA, J) (D.N.RAY,J) RAGHUNATH R NAIR Page 21 of 21 Uploaded by RAGHUNATH R NAIR(HC00196) on Mon Jan 20 2025 Downloaded on : Fri Jan 31 23:30:51 IST 2025