Case Details: Kaarya Facilities & Services Ltd. Versus Union of India (2025) 33 Centax 42 (Bom.)
Judiciary and Counsel Details
- M.S. Sonak and Jitendra Jain, JJ.
- S/Shri Akash Rebello a/w. Nadeem Sharma, Paras Gosar i/b. Shouvik Kumar Roy, for the Petitioner
- S/Shri Jitendra B. Mishra a/w. Ashutosh Mishra and Rupesh Dubey, for the Respondent
Facts of the Case
The petitioner, engaged in proceedings under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, was subjected to investigation wherein the director admitted short-paid Service Tax liability, while the jurisdictional officer under CGST, in an affidavit in reply, stated a lower figure. The Department rejected the petitioner’s SVLDRS application on the ground that tax dues had not been quantified on or before the prescribed cut-off date under Section 2(r) of the Finance (No. 2) Act, 2019. The petitioner contended that such rejection was contrary to CBIC ‘Circular No. 1071/4/2019-CX.8, dated 27-08-2019’ and the Department’s answers to Frequently Asked Questions dated 24-12-2019, both of which clarified that ‘written communication’ under Section 2(r) included a letter intimating duty demand or liability admitted during enquiry, investigation, or audit. It was submitted that the admitted and recorded liability constituted quantification before the cut-off date, and that the Department’s approach amounted to non-consideration of binding clarifications. The Department opposed the petition citing delay and laches, and alternatively sought imposition of reasonable interest in case relief was granted. The matter was accordingly placed before the High Court.
High Court Held
The High Court held that the petition had not been filed after such unreasonable delay as to create vested or parallel rights in favour of the Department of Revenue, noting that part of the intervening period was impacted by the COVID-19 pandemic. Upon examining the affidavit in reply and the director’s admission in the context of ‘Circular No. 1071/4/2019-CX.8, dated 27-08-2019’ and the Department’s answers to Frequently Asked Questions dated 24-12-2019, the Court found that the Service Tax dues stood quantified prior to the statutory cut-off date as required by Section 2(r) of the Finance (No. 2) Act, 2019. It was further held that the lower quantification in the Department’s affidavit, as compared to the director’s admission, could not be a ground to disqualify the petitioner from the Scheme’s benefits. While granting equitable relief, the Court directed that the petitioner pay simple interest at 6% per annum from the date following the permissible payment period until actual payment, noting that the petitioner had retained and used the amount for several years. The matter was remanded to the jurisdictional officer under CGST for reconsideration of the SVLDRS application and fresh computation of the amount payable with applicable interest.
List Of Case Cited
- Kundan Industries Ltd. v. Union of India — Writ Petition No. 5943 of 2021, decided on 1-4-2022 by Bombay High Court
- Landmark Associates v. Union of India — 2021 (47) G.S.T.L. 20 (Bom.)
- Thought Blurb v. Union of India — 2020 (43) G.S.T.L. 499 (Bom.)
