In Nabeel Construction Pvt. Ltd. v. Union of India & Ors., the Bombay High Court directed the tax department’s administrative branch to make efforts to incorporate the Sabka Vishwas (Legacy Dispute Resolution) system in order to address unresolved tax lawsuits from the pre-GST era. The Legacy Dispute Resolution Scheme offers a complete waiver of interest, penalty, and fines, as well as immunity from prosecution and a 40-70 percent reduction in the payment of contested tax amounts. But one requirement for participation in the scheme is that the tax liability be quantified by June 30, 2019.

The scheme’s goal, according to a bench of Justices RD Dhanuka and SM Modak, is to encourage people to settle their tax debts who have legitimately disclosed them before to June 30, 2019.

The Central Board of Indirect Tax and Customs (CBITC) published circulars to carry out the scheme’s goal of promptly resolving pre-GST litigation and providing benefits to businesses that take advantage of the chance.

In its ruling, the High Court directed all department heads to do everything possible to unload the baggage associated with legacy taxes, such as the Central Excise and Service Tax, which have been absorbed under GST, so that businesses can start fresh and focus on GST.The Court further stressed the significance of making the project a huge success.

The government’s administrative apparatus will be able to focus entirely on assisting taxpayers with the smooth implementation of GST. It is impossible to stress the importance of making this programme a huge success. According to the decree, authorities have to familiarise themselves with the system and actively ensure its smooth implementation. The remarks were made in response to a petition filed by Nabeel Constructions appealing a Designated Committee judgement rejecting a statement made by Nabeel’s director declaring the tax due and payable in order to benefit from the scheme’s amnesty component. In the present plea, the petitioner sought to pay its service tax liability under the plan.

The question before the Court was whether the liability had been calculated before the cut-off date.

The Court stated that resolving this issue would necessitate a personal hearing, which the corporation had not been provided. The Court stated that it may have mentioned the petitioner’s quantification of tax dues during the recording statement of the director by the investigating officer, which was not disputed by the respondents.The Court concluded that the tax authorities’ judgement was not only in violation of many legal principles established by the Court, but also in violation of the Central government’s aim in adopting the plan for the benefit of the assessees and to get them out of litigation.

After noting this, the Bench remanded the case to the Designated Committee of the Central Goods and Services Taxes & Central Excise to consider the declaration filed by the petitioner’s director in accordance with the scheme and grant consequential reliefs after giving them a fair hearing before finally deciding the issue.

Nabeel was represented by Khaitan & Co.’s Abhishek Rastogi Pratyushprava Saha and Kanika Sharma.

The Department of Revenue and the CGST and Central Excise departments were represented by Senior Advocate Pradeep Jetly and Advocate Jitendra Mishra.


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