The Delhi High Court bench comprising of Hon'ble Mr. Justice Yashwant Varma and Hon'ble Mr. Justice Dharmesh Sharma elaborated on Sabka Vishwas Legacy Dispute Resolution Scheme.
The Court provided detailed elucidation of Sections 123 and 124 of the Scheme, whereby the former pertained to duty amounts that were under dispute or capable of being disputed, and the latter encompassed duty amounts that were undisputed or had achieved finality.
Brief Facts:
The Petitioner was a company that had been incorporated under the Companies Act, 1956. It was involved in the business of offering hardware support and services in the fields of broadcasting and telecommunication, including terrestrial and satellite operations. The company's main activities included supplying broadcast equipment, handling system integration, and providing design, consultancy, and support services related to broadcasting.
The Petitioner had been subjected to service tax assessment related to commission income received from outside India. A Commissioner's order dated June 14, 2019 imposed a demand of Rs. 1,00,89,786/- along with interest and penalty. The Petitioner had the right to file an appeal within two months of receiving the order, which was due to expire on August 18, 2019.
A dispute resolution scheme called Sabka Vishwas (Legacy Dispute Resolution) Scheme (hereinafter referred to as “SVLDR”) was announced on July 5, 2019, and later made operational on September 1, 2019. Initially, the petitioner faced an issue with the scheme as it excluded cases where no appeal was pending by the specified date, even if the appeal could be filed within the allowed timeframe.
The Petitioner filed a writ petition challenging this exclusion and subsequently withdrew the appeal in compliance with a circular. The writ petition was disposed of on December 3, 2019, after the Petitioner's grievances were addressed. However, the Petitioner approached the Court again as the authorities objected to the classification of their tax dues under the scheme, claiming they should be categorised differently.
Observations of the Court:
Having reviewed the SVLDR Scheme outlined in Chapter V of the Finance Act, 2019, it was opined that it allowed all individuals to submit a declaration if there were no pending litigations related to duty/tax dues before the specified "cut-off date." Section 123 of the Scheme defined "tax dues'' to include outstanding duty amounts and the term "amount in arrears." Sections 124(1)(a) & (c) classified the reliefs offered by the Scheme as either "litigation" or "arrears." The former involved disputed or disputable duty amounts, while the latter comprised undisputed or finalised duty amounts.
The Bench held that an interpretation of these provisions indicated that the SVLDR Scheme encompassed cases with some level of finality regarding duty/tax dues as of the "cut-off date." This interpretation was supported by a straightforward reading of the Circular. Considering the provisions and clarifications provided by the respondents, it was concluded that the petitioner, who filed an appeal against duty/tax imposition after the "cut-off date," was not eligible for the SVLDR Scheme.
The decision of the Court:
Accordingly, the Delhi High Court dismissed the petition.
Case Title: Ideal Broadcasting India Pvt. Ltd v Union of India & Ors.
Case No.: Writ Petition Civil No. 3739 of 2020
Coram: Hon'ble Mr. Justice Yashwant Varma and Hon'ble Mr. Justice Dharmesh Sharma
Advocates for Petitioner: Advs. Ms. Kavita Jha, Mr. Shammi Kapoor, Mr. Vishal Kumar and Ms. Prachi Jain
Advocates for Respondent: Advs. Mr. Harpreet Singh, Ms. Suhani Mathur , Mr. Jatin Kumar Gaur, Mr. Harish Vaidyanathan Shankar,Mr. Srish Kumar Mishra and Mr. Alexander Mathai Paikaday
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