Delhi High Court in its judgement dated 31.08.2020 on W.P(C) 5393/2020 (Chaque Jour HR Services Pvt Ltd) has upheld the rejection of assessee’s declaration under Sabka Vishwas Sabka Vikas Legacy Dispute Resolution Scheme, 2019 (SVLDRS Amnesty Scheme) on account of no quantification of ‘tax dues.
The Court finds that assessee’s statement dated July 26, 2018 admitting its liability only to the extent of Service Tax amounting to Rs. 2 crores (approx.) cannot be construed as quantification of ‘tax dues’ prior to June 30, 2019. The order elaborates that “admission of liability of Service Tax, to Court understanding, cannot be held to be quantification of the entire ‘tax dues’.
It was stated by the Court in the order that Section 125(1)(e) in a way compliments Section 123(c) of Finance Act, 2019 and quantification of ‘tax dues’ is imperative for a declarant to become eligible for applying under the scheme while meaning of the word ‘quantified’ has been extended and broadened, obviously keeping in view objective of the Scheme vide various Circulars.
The Court further observed that section 129 of Finance Act “nowhere contemplates fragmented settlement of tax dues” while clarifying that issuance of discharge certificate under section 126 w.r.t. amount payable under the Scheme is considered to be conclusive as to the matter and the time period stated therein.
“Certainly, SVLDR is a beneficial scheme and purposive interpretation of its terms is desirable. However, we cannot give an interpretation that would run counter to its objective… The declarants are thus expected to come clean in order take its benefit” the Court stated in its order.
It was also explained by Court that it “cannot construe admitted tax liability to be ‘matter’ and the remainder dues as per show-cause notice to be a ‘separate matter’, especially since the investigation was still ongoing on the relevant date”;
The bench comprising of Justice Manmoham and Sanjeev Narula held that all the demands in the show cause notice dated March 13, 2020 arise from the same investigation, although under different heads, whilst observing that assessee only admitted service tax liability and did not make disclosure of other tax dues as a result of which after investigation the Respondents issued SCN for Rs. 14 crores (approx.)
The order of Hon’ble Court also highlighted that “Settlement under the SVLDRS scheme with respect to the Service Tax due, with continuation of parallel proceeding for the remainder or differential amount by way of adjudication of the show cause notice, would also not result in resolution of the legacy dispute, which is the predominant aim of the scheme” .
READ ORDER:
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