Ge Power India Limited vs The Union Of India & Ors
2023 Latest Caselaw 964 Cal

                     IN THE HIGH COURT AT CALCUTTA
                       Constitutional Writ Jurisdiction
                               Appellate Side


Present :-    Hon'ble Mr. Justice Md. Nizamuddin



                               WPA No. 7197 of 2020

                              GE Power India Limited
                                        Vs
                             The Union of India & Ors.




      For the Petitioner             :- Mr. Tushar Jarwal, Adv.
                                        Mr. Avra Mazumdar, Adv.
                                        Mr. Suman Bhowmik, Adv.
                                        Mr. Samrat Das, Adv.
                                        Mr. Binayak Gupta, Adv.


      For the Union of India         :-   Mr. K.K. Maiti, Adv.
                                          Ms. Ekta Sinha, Adv.
                                          Ms. Aishwarya Rajyashree, Adv.




      Judgement On                   :-       06.02.2023


   MD. NIZAMUDDIN, J.

Heard learned advocates appearing for the parties.

By this writ petition petitioner has challenged the impugned orders dated

12th February, 2020 rejecting the petitioner's applications under Sabka

Vishwas (Legacy Dispute Resolution) Scheme (SVLDRS) 2019 and rules

thereunder.

Questions of law involved in this writ petition are as hereunder:

(i) Whether on the facts and in the circumstances of the case the impugned

orders passed under the 'SVLDRS' 2019, by the respondent authority

concerned rejecting the applications of the petitioner by holding that

the petitioner submitted the applications in the wrong category as

showing "SCN duty pending" and that the two show cause notices in

question had already been adjudicated by one order-in-original and

upheld by the CESTAT and High Court, is erroneous in law and

perverse?

(ii) Whether on the facts and in the circumstances of the case applications

filed by the petitioners on the date when the aforesaid scheme was

existing, can show cause cum demand notices in question be called

'finally heard' for denying the benefit under the said Scheme when the

order-in-original on the show cause notices in question were set aside

by the CESTAT and the matter was remanded back to the

adjudicating authority for readjudication of the same and in view of

the admitted fact that on or before the date of filing the application

under the aforesaid scheme no final hearing was taken place and no

order was passed by the adjudicating authority after the order of

remand by CESTAT on the show cause cum demand notices?

(iii) Whether on the facts and in the circumstances of the case dismissal of

the earlier writ petition by this Court confining to the only issue of

legality of interim order by the CESTAT passed on Appeal filed by the

petitioner asking the petitioner to make pre-deposit of 25% of the

disputed tax and which was dismissed for such non-deposit and

subsequently the appeal was restored on making payment of such

pre-deposit as directed by the appellate authority (CESTAT) and

setting aside the order-in-original passed by the adjudicating

authority and remanding the matter back to readjudicate the show

cause notices in question and admittedly no final hearing took place

on the said show cause notices and were not adjudicated afresh and

were pending on the date of filing the applications under the aforesaid

scheme, impugned order of rejection of the applications under the

aforesaid scheme is legal and valid?

(iv) Whether on the facts and in the circumstances of the case and in view of

Section 124(1)(a) of the aforesaid Scheme can the 'tax dues' relatable

to show cause notices in question be called 'not pending' on 30th

June, 2019 or on the date of filing the application under the aforesaid

scheme during the existence of the aforesaid scheme?

(v) Whether on the facts and in the circumstances of the case, defence of

the respondents in rejecting the application of the petitioner by relying

on Section 125(1)(a) of the aforesaid scheme, is tenable in the eye of

law?

(vi) Whether on the facts and in the circumstances of the case stand of the

respondents that no relief can be granted to the petitioner under the

aforesaid Scheme since the same is not in existence now, is tenable in

the eye of law though the applications under the aforesaid Scheme

were filed before the expiry of the same?

Facts involved in this writ petition, in brief, are as hereunder:

A show cause notice dated 10.03.1997 was issued to the petitioner by

Superintendent of Central Excise, Durgapur, calling upon it to show cause as

to why short payment of duty of Rs.51,01,958/- for the period from 1.11.1996

to 28.02.1997 should not be demanded from the petitioner under Rule 9(2) of

the Central Excise Rules, 1944 read with Section 11A(1) of the Central Excise

Act, 1944.

On similar issue, another show cause notice was issued to the petitioner on

22.09.2004 by Commissioner of Central Excise, Bolpur, for the period starting

from 16.03.1995 to 31.10.1996 raising a demand of Rs.2,94,18,967/-.

The demand raised in the aforesaid show cause notices were confirmed by a

common order-in-original passed by commissioner of Central Excise, Bolpur,

against which petitioner filed appeal and stay petition before the CESTAT.

On 09.07.2007 the stay application filed by the petitioner came up for

hearing before the CESTAT wherein an order was passed (hereinafter referred

to as "Stay Order") directing the petitioner to make a pre-deposit of 25% of the

disputed excise duty as a condition precedent for hearing the appeal in

question on merits and the date of compliance of the said order was fixed on

17.09.2007.

Thereafter petitioner filed a miscellaneous application on 31.08.2007 before

the CESTAT seeking modification of the aforesaid order dated 09.07.2007

which had directed payment of pre-deposit of 25%. In the said modification

application, the petitioner prayed that it may be allowed to make the pre-

deposit by way of a bank guarantee and not by way of cash. Due to non

compliance of the condition of stay, appeal of the petitioner was dismissed by

the CESTAT on 19.11.2007.

On 30.03.2009 the restoration application dated 05.12.2007 for restoring

the appeal was dismissed by the CESTAT.

On 21.10.2009 the petitioner filed a writ petition being W.P. No. 1064 of

2009 against the aforesaid order dated 19.11.2007 dismissing the appeal for

not making pre-deposit of 25% of the disputed tax and order dated 30.03.2009

dismissing restoration application by the CESTAT. The limited ground of

challenge in the said writ petition was against the ex parte order dated

19.11.2007 dismissing the appeal of the petitioner by the CESTAT due to non-

compliance of making pre-deposit, that it was in gross violation of the

principles of natural justice as no hearing notice was given to the petitioner. It

further challenged the order dated 30.03.2009 in the said writ petition on the

ground that the restoration application of the petitioner for restoration of

appeal was dismissed without considering the modification application dated

31.08.2007 filed by the petitioner.

On making pre-deposit in compliance of the order of CESTAT, the appeal

filed by the petitioner (Excise Appal No. 219 of 2007), was heard on merit on

18.05.2016 and the CESTAT allowed the appeal of the petitioner by setting

aside the order-in-original dated 17.11.2006 and remanded the matter back to

the adjudicating authority for de novo consideration on the notices cum

demand in question. Consequently, the proceedings with respect to the said

two show cause notices dated 10.03.1997 and 22.09.2004 got revived and

since then it was pending before the adjudicating authority for fresh

adjudication on the date of filing of applications under the aforesaid scheme

and is pending even till date and in view of the aforesaid order of the CESTAT

restoring the appeal and remanding the matter back for reconsideration, the

aforesaid writ petition had already become infructuous though on 08.09.2016

the said writ petition no. 1064 of 2009 filed by the petitioner was dismissed by

this Court for default which could not have any impact on the show cause

notices pending for readjudication after the order of remand by the CESTAT.

On 21.08.2019 Central Government floated a scheme called Sabka Vishwas

(Legacy Dispute Resolution) Scheme (SVLDRS)- 2019 which provided a one-

time measure for liquidation of disputes of Central Excise and Service Tax.

Dispute resolution and amnesty are the two components of the said scheme.

Under the said scheme any assessee whose show cause notice or appeals

arising out of a show cause notice pending as on 30.06.2019 could have opted

for the said scheme. The said scheme came into force on 21.08.2019 and on

31.12.2019 the Central Government by Notification No. 07/2019 Central

Excise-NT, extended the last date of filing declaration under the scheme from

31.12.2019 to 15.01.2020.

On 15.01.2020 as the show cause notice dated 10.03.1997 and 22.09.2004

were pending for adjudication as on 30.06.2019 before the adjudicating

authority after the order of remand by the CESTAT, the petitioner filed two

declarations under SVLDRS-2019 for claiming of relief and settlement of its

aforesaid pending tax/duty dispute.

The respondents concerned on 12.02.2020 rejected both the aforesaid

applications/declarations of the petitioner. The common ground taken by the

authority concerned for rejecting both the declarations was that the

applications were filed in the wrong category as 'SCN involving duty pending'

whereas two show cause notices had been adjudicated by one order-in-original

and upheld by the CESTAT and this Writ Court. Further, according to the

authority concerned, with respect to the declaration filed for SCN dated

22.09.2004, there is an additional ground of rejection that there was no proof

of payment of deposit of Rs.86,00,000/-.

Petitioner submitted that the aforesaid impugned orders rejecting the

aforesaid applications of the petitioner are on the aforesaid two grounds as

appears from order of rejection being Annexure P-16 and P-17 to the instant

writ petition are arbitrary, illegal, bad in law and is perverse and is in total

disregard of the very object and purpose of the aforesaid scheme since the

respondents authority ignored the factual and legal position that as per Section

123 (b) of the said scheme show cause cum demand notices in question

received by the petitioner which was admittedly received before 30th June,

2019, was the 'amount of duty payable' and the said tax due was pending as

per Section 124(1)(a) of the aforesaid scheme and as per Section125(1)(c) of the

said scheme no final hearing had taken place on the show cause notices in

question after the order of remand on the appeal filed by the CESTAT after

restoring the appeal and dismissal of the writ petition by the Writ Court which

was filed against the limited issue of conditional interim order of stay on

making pre-deposit imposed by the CESTAT and dismissal of the said writ

petition for default has no impact on the pendency of adjudication of the show

cause cum demand notices after the order of remand by the CESTAT.

Petitioner in support of his contention relies on several decisions of the

Hon'ble Bombay High Court in the case of Jyoti Plastic Works Pvt Ltd. -Vs-

Union of India reported in 2020 (43) G.S.T.L 675 (Bom.) and judgment of the

Hon'ble Delhi High Court in the case of Mukesh Jain, Proprietor of M/s.

Jainsons -Vs- Union of India & Ors. reported in 2022 (11) TMI 1229- Delhi

High Court on the proposition of law that if adjudication order on the 'amount

of tax' due is set aside by the appellate authority and the matter is remanded

back to the adjudicating authority for reconsideration of the issues on merit

apart from quantification, it should be treated as pending if no final

adjudication order has been passed on the date of filing the application under

the aforesaid scheme.

Petitioner relies on a decision of the Hon'ble Bombay High Court in the case

of Morde Foods Pvt. Ltd. -Vs- Union of India reported in 2021 (50) G.S.T.L. 43

(Bom.) on the proposition of law that if an assessee was at the stage of show

cause notice with no fresh adjudication order after the order of remand by the

appellate authority then certainly it will be eligible to file declaration under the

said scheme.

Petitioner relies on a decision of the Division Bench of this Court in the case

of M/s. M.P. Khaitan -Vs- The designated Committee & Ors. reported in 2022

(3) TMI 322 - Calcutta High Court on the proposition of law that stand of the

revenue that if the scheme has already expired no relief can be granted to the

petitioner is not tenable in the eye of law if the application was filed before the

date of expiry of the Scheme.

Learned Advocate appearing for the respondents opposes the writ petition

by defending the impugned order of rejection of the applications of the

petitioner under the said scheme by contending as hereunder:

(i) That appeal filed by the petitioner had already been finally heard before

the date of coming into effect the aforesaid scheme and as such

petitioner is not eligible to avail the benefit of the said scheme in view

of Section 125(1)(a) of the said scheme.

(ii) That the said scheme has already been expired and is not available now,

no relief can be granted to the petitioner.

(iii) That in view of dismissal of the writ petition filed by the petitioner before

the commencement of the said scheme, petitioner is not entitled to

avail the benefit of the said scheme.

(iv) That there was no proof of deposit of the amount disclosed in the

scheme.

Respondent in support of his contention has relied on an unreported

decision of the Hon'ble Supreme Court dated 18th February, 2022 in the

case of M/s. Yashi Constructions -Vs- Union of India in Special Leave to

Appeal (C) No. 2070/2022.

Before dealing with contentions of the parties, some provisions of the

aforesaid Scheme being 'SVLDRS' 2019, which are relevant, are quoted

hereunder:

121. In this Scheme, unless the context otherwise requires,-

(a)........................ ..........................

(f) "appellate forum" means the Supreme Court or the High Court or the

Customs, Excise and Service Tax Appellate Tribunal or the Commissioner

(Appeals);

..............................

.............................

.................................

123. For the purposes of the Scheme, 'tax dues" means -

(a)................................

(b) where a show cause notice under any of the indirect tax enactment

has been received by the declarant on or before the 30th June, 2019, then, the

amount of duty stated to be payable by the declarant in the said notice:

Provided that if the said notice has been issued to the declarant and

other persons making them jointly and severally liable for an amount, then, the

amount indicated in the said notice as jointly and severally payable shall be

taken to be the amount of duty payable by the declarant;

........................................

.............................................

124. (1) Subject to the conditions specified in sub-section (2), the relief

available to a declarant under this Scheme shall be calculated as follows:-

(a) where the tax dues are relatable to a show cause notice or one or

more appeals arising out of such notice which is pending as on the 30th June,

2019, and if the amount of duty is,-

(i) rupees fifty lakhs or less, then, seventy per cent, of the tax dues;

(ii) more than rupees fifty lakhs, then fifty per cent of the tax dues;

125. (1) All persons shall be eligible to make a declaration under this

Scheme except the following, namely:-

(a) who have filed an appeal before the appellate forum and such appeal

has been heard finally on or before the 30th June, 2019;

(b)....................

(c) who have been issued a show cause notice, under indirect tax

enactment for an erroneous refund or refund;

................................

...................................

127. (1)........................

.............................

.................................

(7) Where the declarant has filed a writ petition or appeal or reference before

any High Court or the Supreme Court against any order in respect of the tax

dues, the declarant shall file an application before such High Court or the

Supreme Court for withdrawing such writ petition, appeal or reference and

after withdrawal of such writ petition, appeal or reference with the leave of the

Court, he shall furnish proof of such withdrawal to the designated committee,

in such manner as may be prescribed, along with the proof of payment referred

to in sub-section (5).

Considering the facts and circumstances of the case as appears from record

and taking into consideration the relevant provisions of the aforesaid Scheme

under SVLDRS 2019 particularly on reading together the provisions under

Section 121(f), 123(b), 124(1), 125(1)(a), 125(1)(c) and 125(7), I am of the

considered opinion that the impugned orders dated 12th February, 2020

rejecting the petitioner's applications under the SVLDRS 2019, are arbitrary,

invalid, perverse and not tenable in the eye of law for the following reasons:

(i) On the date of filing of the applications under the aforesaid Scheme on

15th January, 2020 when the aforesaid scheme was valid by virtue of

notification issued by the Central Government it can be easily said

that the applications under the aforesaid Scheme were filed within

time and before the expiry of the aforesaid scheme.

(ii) The show cause cum demand notices in question issued by the

adjudicating authority were received by the petitioner before the 30th

June, 2019, as per Section 123(b) of the aforesaid scheme and the

'duty' was due and payable by the petitioner and the tax dues were

relatable to show cause cum demand notices which were pending

adjudication on 30th June, 2019 as per Section 124(1)(a) of the

aforesaid Scheme.

(iii) Petitioner could not be called not eligible or excluded to make

declaration under the said scheme in view of Section 125(1)(c) of the

aforesaid scheme since no final hearing had been taken place on or

before the 30th June, 2019, after setting aside of the order-in-original

and remanding the matter back by the CESTAT to adjudicating

authority concerned for de novo adjudication on the show cause cum

demand notices in question which is an admitted factual position and

even till date no final order has been passed on the said show cause

cum demand notices in question. Respondents have also failed to

produce any document before this Court to establish that after the

order of remand by the CESTAT, at any point of time final hearing had

been taken place on the show cause cum demand notices in question

and that the same have been adjudicated on or before 30th June,

2019.

(iv) The order of the High Court dismissing the writ petition which was filed

by the petitioner against the interim order passed by the CESTAT

imposing the condition for hearing the appeal of the petitioner to

make pre-deposit of 25% of the tax dues and order of dismissing the

appeal for non-compliance of the said condition, such order of

dismissal of the writ petition will not have any impact on show cause

notices cum demand notices pending for hearing after restoration of

the appeal of the petitioner by the CESTAT on compliance of the

condition of making pre-deposit and remanding back the matter to

the adjudicating authority concerned to adjudicate afresh on the

notices cum demand notices in question and more particularly when

such order of the CESTAT authority restoring the appeal and

remanding the matter for readjudication of show cause notices was

not further challenged by the revenue authority before any forum and

when no final hearing has been taken place before the adjudicating

authority concerned after the order of remand by the CESTAT either

on or before 30th June, 2019 or even till date, in view of such admitted

factual position it can be easily said that the adjudication on the show

cause notices in question was pending on the date of filing of the

applications under the said scheme.

(v) Question of withdrawal of proceeding relating to disputed 'Duty' pending

before the High Court on or before the date of filing the applications

as per Section 127 (7) under the aforesaid Scheme does not arise in

the facts and circumstances of the case since on the date of filing the

applications in question under the aforesaid Scheme no related

proceeding was pending before the High Court.

(vi) Unreported judgment of the Hon'ble Supreme Court in the case of M/s.

Yashi Constructions -Vs- Union of India relied upon by the

respondents has no application in the facts and circumstances of this

case.

In view of the discussion and observations made above, this Writ Petition

being WPA No. 7197 of 2020 is disposed of by setting aside the aforesaid

impugned orders dated 12th February, 2020 rejecting the aforesaid applications

of the petitioner filed under SVLDRS- 2019 and the respondents authority

concerned are directed to grant appropriate relief to the petitioner under the

aforesaid Scheme by reconsidering the aforesaid applications in the light of the

observations made in this judgment, after giving opportunity of hearing to the

petitioner or its authorised representative.

Whole exercise in the aforesaid regard of reconsideration shall be completed

by the respondents authority concerned within a period of 12 weeks from the

date of communication of this order. No order as to costs.

Urgent certified photocopy of this judgment, if applied for, be supplied to the

parties upon compliance with all requisite formalities.

(MD. NIZAMUDDIN, J.)