Facts of the Case

The petitioner, Hans Uttam Finance Limited, engaged in investment banking and project management services, had originally declared Rs. 36,47,132/- as service tax dues under the Service Tax Voluntary Compliance Encouragement Scheme, 2013, paying Rs. 18,50,000/- but failing to pay the balance in time. Following a search by the Anti Evasion Branch on 10.12.2015, the petitioner's director acknowledged the VCES liability and an approximate outstanding sum. Over 2016-2019, the petitioner corresponded extensively with the department, furnishing reconciliation statements, service tax returns, balance sheets and payment challans, ultimately quantifying total service tax dues of Rs. 41,46,677/- for 2010-11 to 2016-17 (later confirmed by the department's own calculation as Rs. 41,46,688/- — a difference of just Rs. 11). When the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 came into force, the petitioner filed a declaration seeking its benefit, but this was rejected on the ground that the "investigation had not been concluded and hence the demand had not been estimated or concluded" on or before the scheme's cut-off date of 30.06.2019. A show-cause notice under Section 73(1) of the Finance Act, 1994 followed.

Issues Involved

  1. Whether the petitioner's service tax dues were "quantified" within the meaning of Section 121(r) of the Finance Act (No. 2), 2019 before the cut-off date of 30.06.2019, so as to make it eligible under the SVLDR Scheme's investigation/enquiry/audit category.
  2. Whether a final departmental determination is a precondition for "quantification" under the Scheme.

Petitioner's Arguments

  • It had, well before 30.06.2019, furnished detailed reconciliation statements and calculation sheets admitting and computing its service tax liability, which the department itself had accepted and acted upon by calling for further challans — showing the dues stood quantified.

Respondent's Arguments

  • Since the investigation had not been concluded and no final demand had been raised by the department before 30.06.2019, the petitioner did not satisfy the "quantified" condition under Section 121(r) and was ineligible for the Scheme.

Court Order / Findings

  • Relying on a consistent line of Bombay High Court decisions (Thought Blurb, G.R. Palle Electricals, Saksham Facility Services, Jai Sai Ram Mech & Tech), the Court held that "quantified" under Section 121(r) includes any written communication of the duty amount — including a taxpayer's own admission of liability during investigation — and does not require a final determination by the Department.
  • Examining the facts, the Court found the respondents had never disputed the petitioner's reconciliation statements; on the contrary, they had called for the calculation sheet and asked the petitioner to deposit the amount so the investigation could conclude — showing tacit acceptance of the quantified figure.
  • Since the Department's own computation (Rs. 41,46,688/-) was materially identical to the petitioner's figure (Rs. 41,46,677/-, a difference of Rs. 11), the dues were held to have been duly quantified before the cut-off date.
  • The rejection of the SVLDRS declaration was held unsustainable and was set aside; the department was directed to process the declaration under the Scheme, and the consequential Section 73(1) show-cause notice — issued on the premise that the dues remained unsettled — was also set aside.

Important Clarification

This is a service-tax amnesty ruling under pre-GST law, not a GST decision. Its practical lesson for any indirect-tax amnesty scheme (present or future) is that a taxpayer's own detailed, undisputed reconciliation of liability, accepted by the department in correspondence, can itself satisfy a "quantification" requirement — a completed investigation or formal demand is not always necessary.

Sections Involved

  • Sections 120 to 135, Chapter V, Finance (No. 2) Act, 2019 (Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019)
  • Section 73(1), Finance Act, 1994

Decision – In Favour of

Decided in favour of the petitioner; the rejection order and the consequential show-cause notice were set aside, and the SVLDRS declaration was directed to be processed. No GST-law question was involved.

Case Details

  • Court: High Court of Delhi at New Delhi
  • Case No.: W.P.(C) 4691/2021 & CM APPL. 14460/2021
  • Neutral Citation: 2023:DHC:3454-DB
  • Coram: Hon'ble Mr Justice Vibhu Bakhru and Hon'ble Mr Justice Amit Mahajan
  • Date of Judgment: 15 May 2023

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