- Case
- ASTUTE VALUERS AND CONSULTANTS PVT LTD v. UNION OF INDIA (Bombay High Court, 12-12-2025)
- Law
- Central Excise Act, Central Goods and Services Tax Act.
Facts: The Petitioner, Astute Valuers and Consultants Pvt. Ltd., sought relief under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) after an audit revealed discrepancies in their financial records for 2013-2018. The Petitioner initially declared tax dues of Rs. 21,03,943 under the "Arrears" category, claiming an inadvertent error, while being eligible under the "enquiry, investigation or audit" category for Rs. 41,91,121. The Petitioner paid Rs. 8,41,577.20 as quantified under the SVLDRS and received a discharge certificate dated 22 February 2020. Subsequently, the Respondents issued show cause notices demanding interest on delayed service tax payments for 2014-2016 and 2016-2017, despite the discharge certificate.
Procedural Posture: The Petitioner filed a Writ Petition (No. 74 of 2023) in the High Court of Judicature at Bombay under Article 226 of the Constitution of India, challenging the show cause notices and seeking a direction to consider their declaration under the investigation category and grant the benefit of Rs. 8,41,577.20.
Issue: Whether the issuance of show cause notices demanding interest on delayed tax payments after the issuance of a discharge certificate under the SVLDRS is legally sustainable, and whether the Petitioner is entitled to have their declaration considered under the "enquiry, investigation or audit" category, despite initially filing under the "Arrears" category.
Holding: The High Court allowed the Writ Petition, setting aside the show cause notices and directing the Respondents to consider the Petitioner's declaration under the investigation category and grant the benefit of Rs. 8,41,577.20.
Reasoning: The Court reasoned that the discharge certificate issued under Section 129 of the Finance Act, 2019 is conclusive regarding the matter and time period covered, precluding further demands for duty, interest, or penalty. The Court emphasized that the SVLDRS aimed to liquidate past disputes and encourage disclosure of unpaid taxes, and the Respondents' actions were contrary to the scheme's objectives and the provisions of Sections 124, 126, and 129 of the Finance Act, 2019. The Court also noted that the Petitioner was eligible under Section 124 of the Finance Act, 2019, and the incorrect categorization of the declaration should not deprive them of the scheme's benefits. The Court cited previous decisions, including Thought Blurb vs. Union of India and Delight Fortune Pvt. Ltd. vs. Union of India, to support the view that demanding interest and penalty after a discharge certificate is violative of Section 129 of the Finance Act, 2019.
