Kerala High Court
Prasanth M.G vs Union Of India on 30 November, 2021
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE BECHU KURIAN THOMAS
TUESDAY, THE 30TH DAY OF NOVEMBER 2021 / 9TH AGRAHAYANA, 1943
WP(C) NO. 21357 OF 2021
PETITIONER :
PRASANTH M.G.,
AGED 42 YEARS
MULLAYIL HOUSE,
PUTTUMANOOR,
PUTHENCRUZ P.O.,
ERNAKULAM-682 308.
BY ADVS.
JOSE JACOB
JAZIL DEV FERDINANTO
RESPONDENTS:
1 UNION OF INDIA
REPRESENTED BY SECRETARY,
MINISTRY OF FINANCE,
DEPARTMENT OF REVENUE,
NORTH BLOCK,
NEW DELHI-110001.
2 THE ASSISTANT DIRECTOR (COST),
OFFICE OF THE ASSISTANT COMMISSIONER OF CENTRAL TAX & CENTRAL
EXCISE (AUDIT),
COCHIN CIRCLE V,
CENTRAL EXCISE BHAVAN,
KATHRIKADAVU,
KALOOR P.O.,
COCHIN-17.
3 THE ASSISTANT COMMISSIONER (SVLDRS),
OFFICE OF THE COMMISSIONER OF CENTRAL TAX & CENTRAL EXCISE,
KOCHI,
CENTRAL REVENUE BUILDING,
I.S.PRESS ROAD,
KOCHI-682018.
4 THE ASSISTANT COMMISSIONER,
OFFICE OF THE ASSISTANT COMMISSIONER OF CENTRAL TAX & CENTRAL
EXCISE,
PERUMBAVOOR DIVISION,
G-ARCADE,
THOTTUMKAL ROAD,
PERUMBAVOOR-683542.
5 THE COMMISSIONER OF CENTRAL TAX & CENTRAL EXCISE,
OFFICE OF THE COMMISSIONER OF CENTRAL TAX & CENTRAL EXCISE,
CENTRAL REVENUE BUILDING,
I.S.PRESS ROAD,
KOCHI-682018.
ADV.SREELAL.N.WARRIER-R2 TO R5
ADV.P.VIJAYA KUMAR, ASGI
WP(C) NO. 21357 OF 2021
2
THIS WRIT PETITION (CIVIL) HAS COME UP FOR ADMISSION ON 25.11.2021, THE
COURT ON 30.11.2021 DELIVERED THE FOLLOWING:
WP(C) NO. 21357 OF 2021
3
BECHU KURIAN THOMAS, J.
=======================
W.P.(C) No.21357 of 2021
---------------------------------------
Dated this the 30 th day of November, 2021
JUDGMENT
An inadvertent error while filling up a column in a
form is costing the petitioner dearly. He seeks this
Court's interference to render justice by issuing
appropriate directions, including quashing of orders
in original, imposing demand of service tax already
paid by him.
2. Petitioner is engaged in the service of execution of
works contract. He committed short payment of
service tax, for the financial years 2014-2015, 2015-
2016 and 2016-2017, quantified at Rs.12,30,621/-.
The amount of short payment was intimated to the
petitioner pursuant to an audit. Immediately on
intimation,petitioner cleared the entire liability
along with late fee as per four challans, copies of
WP(C) NO. 21357 OF 2021
which are produced as Ext.P1 and Ext.P1(a) to
Ext.P1(c).
3. Subsequent to the aforesaid payment, a show cause
notice dated 14.10.2019 was issued to the petitioner
proposing to impose interest and penalty under
Sections 75, 76, and 77 of the Finance Act, 1994
(for short, 'the Act') for the non-payment of the
service tax.
4. In the meantime, the Sabka Vishwas - (Legacy
Dispute Resolution) Scheme, 2019 [for short, 'the
Scheme, 2019'] was introduced in exercise of the
powers under section 132 of the Act. The Scheme,
2019 facilitated settlement of arrears and resolution
of disputes relating to the erstwhile Service Tax
and Central Excise Act. Even though petitioner had
cleared the liability under the short assessment,
disputes remained as initiated under the show-
cause notice. Therefore petitioner opted for the
WP(C) NO. 21357 OF 2021
benefit under the Scheme, 2019 by submitting Form
SVLDRS-1.
5. Petitioner claimed that while submitting Form
SVLDRS-1, an inadvertent mistake crept in, at the
hands of the consultant of the petitioner. In the
column specified for 'pre-deposit/any other deposit
of duty' in Form SVLDRS-1, instead of filling the
amount of duty of Rs.12,30,621/- already paid by
the petitioner, it mistakenly was written as "Nil".
In view of the mistaken entry in the form
submitted, petitioner was intimated to pay an
amount of Rs.3,69,186/- towards settlement of duty,
due under the Scheme, 2019.
6. Petitioner claims that, even though he had
discharged the entire liability, as evidenced by
Ext.P1 challans, which was even endorsed in the
show-cause notice, the department ought not to
have demanded any amount from the petitioner.
WP(C) NO. 21357 OF 2021
7. As the mistake in the form submitted came to the
knowledge of the petitioner only when notice of
demand was received, petitioner sought for
rectification of the form submitted. In spite of
petitioner's attempts to rectify the error in the
Form SVLDRS-1 submitted by him, the same was
rejected. By Ext.P10 letter dated 22.09.2021, it was
informed that petitioner had failed to verify the
correctness of the form submitted by him. It was
further stated that petitioner's application for
rectification was not filed within the stipulated time
and since, the declaration under Form SVLDRS-1
submitted by the petitioner lapsed, petitioner was
not entitled to get even the benefit of the Scheme,
2019.
8. It is interesting to mention that, in the meantime,
pursuant to the show cause notice, the 4 th
respondent proceeded to pass an order, imposing
WP(C) NO. 21357 OF 2021
penalty of Rs.2,000/- under Section 77, and a
further penalty of Rs.12,30,621/- under Section
78(1) of the Act. Penalty under Section 76 of the
Act was avoided. It is on account of the aforesaid
circumstances that petitioner has approached this
Court, claiming the benefit of extension of
limitation as ordered by the Supreme Court In Re :
Cognizance for Extension of Limitation (2021 (5)
KLT 689) , for ignoring the delay in filing the
rectification petition apart from challenging the
order in original, imposing penalty upon the
petitioner as per Ext.P8.
9. Adv.Jose Jacob, the learned counsel for the
petitioner contends that the Scheme, 2019 facilitates
settlement of arrears of resolution of disputes and
an assessee, who wishes to settle the pending tax
disputes ought to be provided an option for such a
settlement. The rejection of the application of the
WP(C) NO. 21357 OF 2021
petitioner on account of hypertechnicalities does
not augur well in the nature of the scheme
propounded and further, respondents themselves
ought to have identified the absence of liability
whatsoever. The learned counsel contended that
the application to rectify Form SVLDRS-3 filed by
the petitioner on 31.08.2021 was within time in
view of the Supreme Court Judgment and therefore,
Ext.P10, to the extent it rejects the petitioner's
application for rectification, that too, on the ground
of limitation is perse invalid in the eye of law.
10. I have heard Adv.Jose Jacob, the learned
counsel for the petitioner, learned ASGI as well as
Adv.Sreelal N.Warrier, the learned Standing Counsel
for respondents 2 to 5.
11. A perusal of the documents produced before
this Court shows that petitioner had cleared the
entire liability of Rs.12,30,621/- as on 08.10.2018
WP(C) NO. 21357 OF 2021
and thereafter no liability remained other than
penalty and interest, if any. However, due to the
final audit report and the consequent show cause
notice issued, liabilities remained due. Petitioner
had offered to settle all his liabilities under the
Scheme, 2019 as per the declaration submitted.
Unfortunately, petitioner committed a mistake of
incorporating an entry 'Nil' in Form SVLDRS-1
submitted by him in the column for pre-deposit.
Consequently, when Ext.P5 Form SVLDRS-3 was
issued, liability of the petitioner was shown as
Rs.3,69,186/- for obtaining the benefit under the
Scheme, 2019. Indisputedly, petitioner had any
liability at all for the assessment years 2014-2015
to 2016-2017 and that, the entry in the column was
a mistake.
12. A perusal of the Scheme, 2019 reveals that
once Form SVLDRS-1 is submitted declaring the
WP(C) NO. 21357 OF 2021
option of the assessee, the particulars are required
to be verified by the Designated Committee
constituted under Rule 5 of the Scheme, 2019. The
verification is to be carried out, as provided in
Rule 6 of the Scheme, 2019. The said rule
mandates that the Designated Committee verifies
the declaration submitted based on the particulars
furnished by the declarant as well as the records
available with the Department.
13. Rule 6 of the Scheme, 2019 is extracted as
below:
"6. Verification by designated committee and issue of
estimate, etc.-(1) The declaration made under section 125,
except when it relates to a case of voluntary disclosure of an
amount of duty, shall be verified by the designated
committee based on the particulars furnished by the declarant
as well as the records available with the Department.
(2) The statement under sub-sections (1) and (4) of section
127, as the case may be, shall be issued by the designated
committee electronically, within a period of sixty days from
the date of receipt of the declaration under sub-rule(1) of
rule 3, in Form SVLDRS-3 setting forth therein the
WP(C) NO. 21357 OF 2021
particulars of the amount payable:
Provided that no such statement shall be issued in a case
where the amount payable, as determined by the designated
committee is nil and there is no appeal pending in a High
Court or the Supreme Court.
(3)Where the amount estimated to be payable by the
declarant exceeds the amount declared by the declarant,
then, the designated committee shall issue electronically
within thirty days of the date of receipt of the declaration
under sub-rule (1) of rule 3, in Form SVLDRS- 2, an
estimate of the amount payable by the declarant along with
a notice of opportunity for personal hearing.
(4) If the declarant wants to indicate agreement or
disagreement with the estimate referred to in sub-rule (3) or
wants to make written submissions or waive personal hearing
or seek an adjournment, he shall file electronically Form
SVLDRS-2A indicating the same:
Provided that if no such agreement or disagreement is
indicated till the date of personal hearing and the declarant
does not appear before the designated committee for personal
hearing, the committee shall decide the matter based on
available records.
(5) On receipt of a request for an adjournment under sub-
rule (4), the designated committee may grant the same
electronically in Form SVLDRS-2B:
Provided if the declarant does not appear before the
designated committee for personal hearing after adjournment,
the committee shall decide the matter based on available
WP(C) NO. 21357 OF 2021
records.
(6) Within thirty days of the date of issue of Form SVLDRS-
3, the designated committee may modify its order only to
correct an arithmetical error or clerical error, which is
apparent on the face of record, on such error being pointed
out by the declarant or suo motu by issuing electronically a
revised Form SVLDRS-3."
14. Rule 6 of the Scheme, 2019 envisages the
Designated Committee to ascertain the veracity of
the particulars furnished in Form SVLDRS-1 with
the records available with the Department. This
mandate cannot be ignored and creates a duty upon
the Designated Committee. If the verification as
contemplated under Rule 6 of the Scheme, 2019
was carried out, it would have obviously revealed
the mistake in the declaration submitted. The
Designated Committee ought to have noticed that
the declarant had already paid the duty of
Rs.12,30,621/-. The mistake would have been
noticed and while issuing Form SVLDRS-2 or Form
WP(C) NO. 21357 OF 2021
SVLDRS-3, as the case may be, entries to that
effect would have been incorporated. In cases
where the amount payable is nil, a statement itself
is not required to be issued.
15. Thus, at the stage of verification itself, a
mistake was committed by the Designated
Committee and it failed to abide by the obligations
imposed upon.
16. Of course, petitioner had an opportunity to
rectify the mistake by filing a rectification petition
as per Section 128 of the Act which stipulated a
limitation period of 30 days. Petitioner filed the
application for rectification as Ext.P9. However,
the same was filed only on 31.08.2021, which is
beyond the period of limitation of 30 days
contemplated under Section 128 of the Act.
17. Though petitioner relies upon the Supreme
Court judgment in In Re : Cognizance for
WP(C) NO. 21357 OF 2021
Extension of Limitation (2021 (5) KLT 689) ,
claiming benefit of condonation of the limitation,
the said question need not be considered, since I
have already found that the Designated Committee
itself had committed a mistake under Rule 6.
18. If the Designated Committee had properly
verified the records relating to the petitioner, it
could have noticed that as per the Scheme, 2019,
petitioner was not liable to pay any amount. The
column for filling duty already paid, ought to have
reflected Rs.12,30,621/-, which is the entire amount
of short assessment of duty liable to be paid by the
petitioner. If no amount of duty is payable, then
all what remains is penalty and interest, which is
waived as per the Scheme, 2019. Thus, petitioner
should not have been mulcted with any liability
under the Scheme, 2019.
19. The factual circumstances of this case being as
WP(C) NO. 21357 OF 2021
mentioned above, it is not necessary for relegating
the petitioner back to the Designated Committee, in
view of the peculiar situation that presently exists.
The Designated Committee has practically become
functus offico, by the lapse of the Scheme, 2019
and if the said committee is asked to reconsider
petitioner's case, the procedural requirements and
the technical arrangements would be far too many.
Thus, in order to render justice to the petitioner in
exercise of the jurisdiction under Article 226 of the
Constitution of India, it is declared that the
petitioner is not liable to pay any amount in
accordance with the terms of the Scheme, 2019.
20. Therefore, Ext.P5 Form SVLDRS-3 issued in
respect of the petitioner, Ext.P8 Order-in-Original
No.07/2021-ST dated 05.08.2021 and Ext.P10
communication dated 22.09.2021 shall stand set
aside. The 3 rd respondent shall issue a discharge
WP(C) NO. 21357 OF 2021
certificate to the petitioner, in a time bound
manner, in accordance with law, based on the
observations mentioned in this judgment.
The writ petition is allowed as above.
Sd/-
BECHU KURIAN THOMAS,
JUDGE
AMV/30/11//2021
WP(C) NO. 21357 OF 2021
APPENDIX OF WP(C) 21357/2021
PETITIONER EXHIBITS
Exhibit P1 TRUE COPY OF CHALLAN NO.00116 DATED 27.7.2018.
Exhibit P1(A) TRUE COPY OF CHALLAN NO.00009 DATED 14.9.2018.
Exhibit P1(B) TRUE COPY OF CHALLAN NO.00020 DATED 5.10.2018.
Exhibit P1(C) TRUE COPY OF CHALLAN NO.00145 DATED 8.10.2018.
Exhibit P2 TRUE COPY OF AUDIT REPORT IN APR
NO.627/ST/55/2017-18-361/18 DATED 9.10.2018.
Exhibit P3 TRUE COPY OF SHOW CAUSE NOTICE NO.16/2019(ST)
DATED 14.10.2019
Exhibit P4 TRUE COPY OF FORM SVLRDS-1 ISSUED ON 26.12.2019
ARN LD2612190000463
Exhibit P5 TRUE COPY OF FORM SVLRDS-3 NO.L270220SV300901
DATED 27.2.2020.
Exhibit P6 TRUE COPY OF LETTER NO.PMG/ST 2020-21 DATED
26.10.2020.
Exhibit P7 TRUE COPY OF OFFICE LETTER
C.NO.V/ST/3018/2019ADJN./602/21 DATED 29.3.2021.
Exhibit P8 TRUE COPY OF ORDER -IN-ORIGINAL NO.07/2021-ST
DATED 5.8.2021.
Exhibit P9 TRUE COPY OF APPLICATION FOR RECTIFICATION OF
EXT.P5 FORM SVLDRS-3 DATED 31.8.2021.
Exhibit P10 TRUE COPY OF LETTER
C.NO.SVLDRS/COM2/1629/2019/799/9/2021 DATED
22.9.2021.
RESPONDENTS EXHIBITS NIL
TRUE COPY
