Madras High Court

Vitalrao Jayaprakash vs The Designated Committee Under ... on 23 February, 2022

W.A.No.2450 of 2021

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 23.02.2022

CORAM :

THE HONOURABLE MR. JUSTICE R. MAHADEVAN
and
THE HONOURABLE MR.JUSTICE J. SATHYA NARAYANA PRASAD

Writ Appeal No. 2450 of 2021
and
C.M.P. No. 15719 of 2021

VitalRao Jayaprakash .. Appellant

Versus

1. The Designated Committee under the
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019
Chennai North Commissionerate,
Chennai - 600 034.

2. The Commissioner,
Designated Committee under the
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019
Chennai North Commissionerate,
Chennai - 600 034.

3. The senior Intelligence Officer,
DGGI, Chennai Zonal Unit,
Chennai - 600 006.

4. The Commissioner,
Chennai North Commissionerate,
Chennai - 600 034. .. Respondents

Writ Appeal filed under Clause 15 of Letters Patent against the order
dated 17.09.2020 passed by the learned Judge in W.P. No. 12635 of 2002.
https://www.mhc.tn.gov.in/judis

1/11
W.A.No.2450 of 2021

For Appellant : Ms. P. Jayalakshmi
For Respondents : Mr. H. Siddarth

JUDGMENT

(Judgment of the court was delivered by R.MAHADEVAN, J.)

This Writ Appeal is directed against the order dated 17.09.2020 passed

by the learned Single Judge in W.P. No. 12635 of 2020.

2. The appellant has filed the aforesaid writ petition, seeking to

issue a Writ of Certiorarified Mandamus to call for the records pertaining to

Form SVLDRS-1 bearing ARN No.LD1401200001786 dated 14.01.2020 on

the file of the first respondent and to quash the entry made therein for rejecting

the declaration made by him on the grounds of ineligibility, as illegal,

unconstitutional and consequently direct the first respondent to consider and

accept the declaration filed by him against the Audit Qualification of admitted

duty to the tune of Rs.32,08,952/- as per the provisions of the Act and the

circulars issued by the department under the scheme.

3. The appellant is a cine actor, who has taken up character rolls in

South Indian films. He is also engaged in providing commercial and product

services and receives consideration for the same. The appellant registered

himself under the taxable service category viz., "other taxable services - other https://www.mhc.tn.gov.in/judis

W.A.No.2450 of 2021

than the 119 listed" however he has not paid service tax from the time of

registration and also did not submit service tax returns. While so, on

28.05.2019, search proceedings were conducted at his premises at Chennai and

documents were seized. Thereafter, on 13.06.2019, the appellant voluntarily

submitted certain documents for the purpose of quantification of service tax

liability. On 14.01.2020, the appellant also submitted an application under the

Sabka Vishwas (Legacy Dispute Resolution) Scheme (in short, the scheme),

which provides for quantification of tax liability of those tax payers, who have

been subjected to an enquiry or investigation or audit. However, the

application submitted by the appellant to avail the benefits conferred under the

scheme was rejected by the designated committee constituted under the

scheme, on the ground of ineligibility. Thereafter, a notice dated 27.02.2020

was issued to the appellant calling upon him to show cause as to why an

amount of Rs.32,20,040/- be not demanded towards service tax including cess

for the period from 01.04.2014 to 30.06.2017 together with interest and

penalty. After receipt of the notice dated 27.02.2020, the appellant has filed

the writ petition before this Court on 08.09.2020.

4. The learned Judge, by the order dated 17.09.2020, refused to

entertain the writ petition on the ground that the scheme was in force until https://www.mhc.tn.gov.in/judis

W.A.No.2450 of 2021

30.06.2020, however, the writ petition was filed on 08.09.2020, after the

period specified under the scheme expired. Therefore, the learned Judge,

dismissed the writ petition as not maintainable.

5. Ms. Jayalakshmi, learned counsel appearing for the appellant

submitted that the learned Judge ought not to have summarily dismissed the

writ petition filed by the appellant by merely stating that the scheme was not in

force on the date of filing of the writ petition. She would further submit that

the order rejecting the application submitted under the scheme was passed on

14.01.2020, however, it was communicated to the petitioner only on

04.03.2020. The learned Judge also failed to take note of the fact that the

pandemic situation prevailed in the State had made it impossible for the

appellant to file the writ petition before 30th June 2020. In any event, the relief

prescribed under the scheme is available to an assessee for cases under

investigation and audit, where the duty involved is not quantified and

communicated to the party or admitted by him in a statement made before

30.6.2019. In the present case the appellant has sent a letter dated 13.6.2019

requesting the respondents to quantify the tax liability, much before the period

specified in the scheme, however, the respondents failed to quantify the tax

liability when the scheme was in force. While so, the delay on the part of the https://www.mhc.tn.gov.in/judis

W.A.No.2450 of 2021

respondents in not acting upon his letter dated 13.06.2019 cannot be put

against the appellant.

6. The learned counsel for the appellant invited the attention of this

Court to the judgment of the Delhi High Court in the case of Vaishali Sharma

V. Union of India and others reported in 2020 (8) TMI 81, wherein in para

10, it was observed as follows;

'10. Since it is the petitioner's case that she had admitted her liability to pay service tax on 18th May, 2018 itself, this Court is of the view that the respondents should have given an opportunity of hearing to the petitioner before rejecting the declaration dated 29 December 2019 under the sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. '

7. She also placed reliance on the decision of the Madhya Pradesh

High Court in M/s. Balaji Services and M/s.Balaji Publicity Vs. Union of

India and others reported in 2021 (10) TMI 435, in which it was held as

follows;

“20. A plain reading of the aforesaid paragraphs makes it clear that the 'Scheme' is a beneficent one and aim and object of the Scheme is to unload the baggage of pending litigation relating to service tax and excise duty. While interpreting a beneficent provision, its aim and object cannot be ignored.'

21. Considering the aforesaid in Thought Blurb (supra), it was held that it will be completely illogical and contrary to https://www.mhc.tn.gov.in/judis the object of the 'Scheme' to reject an application on the

W.A.No.2450 of 2021

ground of ineligibility without giving an opportunity to the declarant to explain as to why his declaration should not be accepted and why relief is not due to him. Thus, principles of natural justice were read into the provision by the Bombay High Court in all the aforesaid judgments.

8. By pointing out the above decisions, the learned counsel for the

appellant prayed this Court to allow this writ appeal by setting aside the order

of the learned Judge.

9. On the other hand, Mr. H. Siddarth, learned counsel appearing for

the respondents submitted that the Scheme is fully automated one and any

person desiring to make an application under the scheme is required to answer

a set of questions to decide about the eligibility of such person. The system

will not allow any ineligible person to make any application under the scheme

by furnishing false information. Here, the appellant has filed the application

under the category Enquiry/Investigation/Audit by claiming that the enquiry/

investigation/audit was completed and the dues were quantified before the cut-

off date (30.06.2019), whereas on the face of records, it can be seen that the

enquiry/investigation/audit is not finalised and the amount payable under the

various heads have not been quantified. Since the investigation itself was not

completed and the quantification of liability does not crystallize, the

application of the appellant was rejected on the ground of ineligibility. The https://www.mhc.tn.gov.in/judis

W.A.No.2450 of 2021

learned Judge, taking note of the fact that the writ petition was filed after the

period specified under the scheme has come to an end, has rightly dismissed

the writ petition and it does not call for any interference by this Court.

10. Heard the learned counsel appearing on either side and perused

the materials placed before this Court.

11. On appreciation of the factual matrix of the case, this court finds

that there are no merits in this writ appeal for the simple reason that on

28.05.2019, a search was conducted in the premises of the appellant, pursuant

to which, the appellant submitted a letter dated 13.06.2019 admitting such

investigation and produced certain documents in continuance of the same.

When such being the case, the appeal is hit by the provisions of Clause 121 (r)

and 125 (1) (e) of the Scheme, thereby making himself ineligible to invoke

section 127 (2) of the scheme. The relevant clauses contained under the

scheme are reproduced hereunder:-

"121. In this scheme, unless the context otherwise requires:-

(r) "quantified", with its cognate expression, means a written communication of the amount of duty payable under the indirect tax enactment"

125. (1) All persons shall be eligible to make a declaration under this Scheme except the following, namely https://www.mhc.tn.gov.in/judis

W.A.No.2450 of 2021

(e) who have been subjected to an enquiry or investigation or audit and the amount of duty involved in the said enquiry or investigation or audit has not been quantified on or before the 30th day of June, 2019;

12. Thus, it is evident that for availing the benefits of the scheme, one

of the conditions precedent is that the tax liability of the tax payer ought to

have been quantified. Even though the appellant had submitted a letter dated

13.06.2019, much before the date of closure of the scheme, the fact remains

that his tax liability has not been quantified and therefore he cannot avail the

benefits of the scheme. In fact, the letter dated 13.06.2019 has been given by

the appellant for the purpose of quantification of service tax liability in the on-

going investigation pending against him, which itself is a disqualification for

the appellant to avail the benefits of the scheme. The appellant, in the letter

dated 13.06.2019, did not claim the benefits of the scheme, but only requested

the respondents to quantify the tax liability payable by him. The letter dated

13.06.2019 is self-explanatory and it reads as under:-

"In respect of undergoing investigation relating to the non-payment of service tax, the documents, as mentioned below is submitted herewith for quantification of service tax liability."

13. Thus, the letter dated 13.06.2019 would clearly indicate that the

appellant furnished certain documents only for quantification of the service tax https://www.mhc.tn.gov.in/judis

W.A.No.2450 of 2021

liability and there is no whisper that he intended to avail the benefits of the

scheme. Secondly, the letter also indicates that as on 13.06.2019, the service

tax liability of the appellant has not been quantified, which is one of the pre-

conditions to avail the benefits of the scheme. Therefore, the rejection of the

application of the appellant by the first respondent herein is proper.

14. Even otherwise, as rightly pointed out by the learned Judge, the

writ petition itself was filed after the period specified under the scheme came

to an end, while so, no direction could be issued to the respondents to entertain

the application of the appellant under the scheme. In such view of the matter,

we do not find any illegality in the order passed by the learned Judge

dismissing the writ petition of the appellant.

15. In the result, we confirm the order dated 17.09.2020 passed by the

learned Judge in W.P. No. 12635 of 2020 and consequently we dismiss this

writ appeal. No costs. Connected miscellaneous petition is closed.

                                                                 (R.M.D., J)       (J.S.N.P.,J)

                                                                        23.02.2022
                 Index : Yes / No
                 Internet : Yes / No
                 msr/rsh
https://www.mhc.tn.gov.in/judis



                                                                              W.A.No.2450 of 2021

                  To

                  1. The Designated Committee under the

Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 Chennai North Commissionerate, Chennai - 600 034.

2. The Commissioner, Designated Committee under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 Chennai North Commissionerate, Chennai - 600 034.

3. The senior Intelligence Officer, DGGI, Chennai Zonal Unit, Chennai - 600 006.

4. The Commissioner, Chennai North Commissionerate, Chennai - 600 034

https://www.mhc.tn.gov.in/judis

W.A.No.2450 of 2021

R. MAHADEVAN, J and J. SATHYA NARAYANA PRASAD, J

msr /rsh

WA No. 2450 of 2021

23.02.2022

https://www.mhc.tn.gov.in/judis