Facts of the Case

M/s Balaji Construction Company had made a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, seeking to settle a pre-GST service tax dispute. The Designated Committee of the Central GST Commissionerate rejected the declaration by Order-in-Original No.09/ADDL.COMMR./MRT/2020 dated 05.05.2020, on the sole ground that the amount the petitioner had declared during search proceedings could not be treated as a "quantified" amount for the Scheme's purposes, since no show cause notice had been issued and no opinion on the evaded service tax amount had been formed before the Scheme's cut-off date of 30.06.2019. The petitioner challenged this rejection before the Allahabad High Court, seeking a mandamus directing acceptance of the declaration.

Issues Involved

  1. Whether an amount declared by an assessee during search proceedings (without a preceding show cause notice) qualifies as a "quantified" amount of tax dues eligible for settlement under the Sabka Vishwas Scheme, 2019.
  2. Whether the Designated Committee's rejection of the declaration on that ground was sustainable.

Petitioner's Arguments

  • The amount voluntarily declared during search proceedings should be treated as a quantified amount for purposes of the Scheme, entitling the petitioner to the benefit of settlement.

Respondent's Arguments

  • In the absence of a show cause notice or a formed opinion on the amount evaded before the 30.06.2019 cut-off, the petitioner was not eligible to file a declaration or seek settlement under the Scheme.
  • Counsel for the revenue fairly conceded the controversy was squarely covered by the Court's earlier decision in M/s Magma Industries Limited v. Designated Committee, Office of Commissioner CGST (Writ Tax No.110 of 2021, decided 07.09.2021), and confirmed that decision had attained finality.

Court Order / Findings

  • Recording the concession of both counsel that the dispute was covered by Magma Industries Limited (of which one Bench member was also a part), and finding no reason to differ from that view, the Court allowed the writ petition "for the same reasons and on the same terms."
  • Compliance was directed within three months.

Important Clarification

This is a pre-GST service tax ruling, not a GST decision — the Sabka Vishwas Scheme dealt with legacy service tax and central excise disputes ahead of the GST transition. The order is useful chiefly as a precedent-following disposal: it confirms that amounts declared during search/investigation, even without a prior show cause notice, can qualify as "quantified" dues for the Scheme, per the ratio in Magma Industries.

Sections Involved

  • Finance (No. 2) Act, 2019 — Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (Sections 121-134)
  • Finance Act, 1994 — Service Tax provisions (pre-GST regime)

Decision – In Favour of

Petitioner (M/s Balaji Construction Company) — writ petition allowed, declaration to be accepted, following the Magma Industries precedent.

Case Details

  • Court: High Court of Judicature at Allahabad
  • Case: Writ Tax No.136 of 2021
  • Neutral Citation: 2023:AHC:163463-DB
  • Coram: Hon'ble Saumitra Dayal Singh, J. and Hon'ble Vinod Diwakar, J.
  • Date: 11.08.2023

Link to Download the Order

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