M/S MAGMA INDUSTRIES LIMITED vs. DESIGNATED COMMITTEE OFFICE OF COMMISSIONER CENTRAL GOODS AND SERVICE TAX AND 2 OTHERS

WTAX/110/2021HC AllahabadUPHC01018424202106 September 202111 pages
AI SummaryRemanded

What did the High Court hold?

The Tribunal held that the petitioner's 'tax dues' were 'quantified' before the cut-off date of 30.06.2019. The Tribunal relied on the definition of 'quantified' in Section 121(r) of the Scheme, which means a written communication of the amount of duty payable. It further relied on a CBIC Circular issued under Section 133 of the Scheme, which clarified that an admission of duty liability in writing by a person during an enquiry or investigation would be considered a 'written communication' and thus 'quantified'. The Tribunal found that the director's statement admitting duty liability of Rs. 45,38,231/- on 13.05.2016, along with the earlier panchnama amount, constituted a quantified amount. The Tribunal also held that the CBIC Circular was binding and enforceable, even if it appeared to enlarge the scope of the Scheme, citing the Supreme Court's decision in Commissioner of Customs, Calcutta Vs. IOCL and UCO Bank, Calcutta Vs. Commissioner of Income Tax, W.B. The reasoning of the Designated Committee was found to be contrary to law. The impugned order was set aside, and the matter was remitted to the Designated Committee to issue the necessary SVLDRS-3 form. The petitioner was granted thirty days to deposit the amount and obtain a Discharge Certificate.

What were the facts?

M/s Magma Industries Limited (the petitioner) is challenging an order dated 05.05.2020 by the Designated Committee, which rejected its declaration filed under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. A search on 10.02.2016 revealed a shortage of stock leading to an alleged short payment of Central Excise duty of Rs. 2,18,516/-. A director's statement on 13.05.2016 admitted duty avoidance of Rs. 45,38,231/- on clandestine removal of goods. The petitioner filed a declaration under the Scheme on 13.01.2020, disclosing disputed duty of Rs. 47,56,751/- and an Estimated Amount Payable (EAP) of Rs. 14,27,025.30. The Designated Committee issued a demand on SVLDRS-2, computed the EAP at Rs. 14,27,025.30 (including the Rs. 2,18,516/- already paid), and subsequently rejected the declaration without a hearing.

What were the issues?

1. Whether the petitioner's 'tax dues' were 'quantified' on or before 30.06.2019, making it eligible to file a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, as per Section 125(1)(e) read with Section 121(r) of the Scheme? Assessee's Contention: The petitioner argued that its tax dues were quantified by the admission of liability in the director's statement dated 13.05.2016, which constituted a 'written communication' as per Section 121(r). The subsequent show-cause notice, though issued after the cut-off date, indicated no other material for demand. Revenue's Contention: The revenue contended that the 'tax dues' were not quantified on or before 30.06.2019, as no formal written communication of the final tax liability had been issued by the department before that date. The show-cause notice was issued after the cut-off date.

Which sections of the Income-tax Act were involved?

Section 125,Section 121(r),Section 123(c),Section 124(1)(d),Section 133

AI-generated summary — verify with the full judgment below

1 A.F.R. Court No. - 3 Case :- WRIT TAX No. - 110 of 2021 Petitioner :- M/S Magma Industries Limited Respondent :- Designated Committee Office Of Commissioner Central Goods And Service Tax And 2 Others Counsel for Petitioner :- Suyash Agarwal Counsel for Respondent :- A.S.G.I.,Ramesh Chandra Shukla Hon'ble Naheed Ara Moonis,J. Hon'ble Saumitra Dayal Singh,J.

1.

Heard Sri Suyash Agarwal, learned counsel for the petitioner and Sri R.C. Shukla, learned counsel for the revenue.

2.

Present writ petition raises challenge to the order dated 05.05.2020 passed by respondent no.1-Designated Committee rejecting the declaration filed by the petitioner on SVLDRS-1, seeking settlement of its dispute, under the provisions of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (in short the 'Scheme').

3.

Undisputed facts of the case are, a search was conducted in the case of the petitioner under the provisions of the Central Excise Act, 1944, (hereinafter referred to as the Act) on 10.02.2016 at the business and other premises of the petitioner and its directors etc. In the ‘Panchnama’ drawn on 10.02.2016 itself, an allegation of short payment of Central Excise duty (against shortage of

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 125

All 34 judgments and leading authorities on Section 125 →

Recent GST High Court judgments

Search GST case law →