1. Heard Ms. Deepali Kamble, Learned Counsel for the petitioner; and Mr. Jetly, Learned Senior Counsel along with Mr. J.B. Mishra, Learned Counsel for the respondents.

2. By filing this petition under Article 226 of the Constitution of India petitioner seeks quashing of order dated 10th February, 2020 passed by the Designated Committee rejecting its declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.

3. Petitioner is a company incorporated under the Companies Act, 1956 and is engaged in the business of providing immovable properties on rent to customers. Being a service provider, it was registered as such under the Finance Act, 1994.

4. It is stated that respondent No. 3 i.e. Director General of Central Excise Intelligence, Mumbai Zonal Unit had initiated investigation against the petitioner for alleged short-payment of service tax for the period from April, 2015 to March, 2017. According to the petitioner, it had paid an amount of Rs. 6,88,28,562.00 in cash besides having Cenvat credit of Rs. 4,46,26,170.00; thus, making total payment of Rs. 11,34,54,732.00.

5. When the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (briefly "the scheme" hereinafter) was introduced, petitioner submitted declaration under the "investigation, enquiry or audit" category on 30th December, 2019. Besides mentioning the service tax dues at Rs. 11,70,21,529.00, it was also mentioned that an amount of Rs. 11,34,54,732.00 was paid as pre-deposit. Therefore, tax dues to be paid under the scheme after adjustment of the tax reliefs would be "Nil".

6. By order dated 10th February, 2020, the Designated Committee rejected the said declaration on the ground of ineligibility with the remark that "investigation was still going on as per DGGI report".

7. Aggrieved, present writ petition has been filed.

8. Respondents in their common reply affidavit have stated that based on the investigation carried out against the petitioner a show cause cum demand notice was issued by DGGI to the petitioner for payment of service tax dues amounting to Rs. 17,52,17,590.00 on 2nd November, 2020. The said show cause notice is yet to be adjudicated. Statements have been made regarding evasion of service tax by the petitioner and also of its modus operandi. However, paragraph Nos. 4, 7 and 9 are relevant which are quoted hereunder:-

"4. I say that statement of Shri Shiv Shankar Gurusanthappa Lature, Director of the Petitioners, was recorded under the provisions of Section 83 of the Finance Act, 1994 read with Section 14 of the Central Excise Act, 1944 on 24-11-2016 and 11-5-2017. In his statement, the Director confessed that they have evaded Service Tax payments for the period Financial Year 2015-16 onwards and admitted Service Tax liability as Rs. 12,24,99,843/- for the period 2015-16 and 2016-17.

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7. I say that the Petitioners have not cleared their Service Tax liability, and that the contention made is wrong to this extent. I say that the Petitioners have paid Rs. 6,88,18,562/- (Rupees Six Crore Eighty-Eight Lakhs Eighteen Thousand Five Hundred and Sixty-Two Only) in cash against the total admitted liability of Rs. 12,24,99,843/- by them during investigation, which was not paid earlier. However, based on investigation, the amount of Service Tax liability has been quantified as Rs. 17,52,70,590/- (Rupees Seventeen Crore Fifty Two Lakhs Seventy Thousand Five Hundred and Ninety Only) by DGGI.

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9. I say that therefore, the contention made by the Petitioners is wrong, and that out of the total admitted tax liability of Rs. 12,24,99,843/- by the Director, an amount of only Rs. 6,88,18,562/- has been discharged by the Petitioners."

9. Ms. Kamble, Learned Counsel for the petitioner submits that going by the averments made in the reply affidavit of the respondents themselves it is an admitted position that in his statement recorded before the service tax authorities on 24th November, 2016 and 11th May, 2017 Director of the petitioner Mr. Shivshankar Lature had admitted service tax liability of Rs. 12,24,99,843.00. This is admissible quantification under the scheme. She submits that the above quantification was prior to the cut off date of 30th June, 2019. That being the position, respondents could not have declared the petitioner as ineligible to file the petition under the scheme. Therefore, such rejection of declaration of the petitioner is illegal and is liable to be set aside and quashed.

10. On the other hand, Mr. Jetly, Learned Senior Counsel appearing for the respondents submits that only upon issuance of show cause notice dated 2nd November, 2020 can it be said that the service tax dues of the petitioner stood quantified at Rs. 17,52,70,590.00. This according to him being beyond the cut off date of 30th June, 2019 would render the petitioner ineligible to make a declaration under the scheme under the category of investigation, enquiry or audit. Statements made by the Director of the petitioner admitting certain service tax liability cannot be construed to be quantification of the service tax dues because that stage was reached only upon issuance of show cause notice dated 2nd November, 2020 which is after the cut off date i.e. after 30th June, 2019. Therefore, no interference is called for.

11. Submissions made by Learned Counsel for the parties have been duly considered.

12. Issue raised in the present writ petition i.e. eligibility of the petitioner or maintainability of its declaration to avail the benefits of the scheme under the category of "investigation, enquiry or audit" on the ground that quantification of the service tax dues of the petitioner for the related period was not quantified on or before 30th June, 2019, is no longer res integra.

13. In Thought Blurb v. Union of India, 2020-TIOL-1813-HC-MUM-ST : 2020 (43) G.S.T.L. 499 [LQ/BomHC/2020/1286 ;] ">2020 (43) G.S.T.L. 499 [LQ/BomHC/2020/1286 ;] [LQ/BomHC/2020/1286 ;] (Bom.), this Court faced with a similar issue referred to the circular dated 27th August, 2019 of the Central Board of Indirect Taxes and Customs (briefly "the Board" hereinafter) whereafter it was held as under:-

"47. Reverting back to the circular dated 27th August, 2019 of the Board, it is seen that certain clarifications were issued on various issues in the context of the scheme and the rules made thereunder. As per paragraph 10(g) of the said circular, the following issue was clarified in the context of the various provisions of the Finance (No. 2) Act, 2019 and the Rules made thereunder:-

Cases under an enquiry, investigation or audit where the duty demand has been quantified on or before the 30th day of June, 2019 are eligible under the scheme. Section 2(r) defines "quantified" as a written communication of the amount of duty payable under the indirect tax enactment. It is clarified that such written communication will include a letter intimating duty demand; or duty liability admitted by the person during enquiry, investigation or audit; or audit report etc.

48. Thus as per the above clarification, written communication in terms of section 121(r) will include a letter intimating duty demand or duty liability admitted by the person during enquiry, investigation or audit etc. This has been also explained in the form of frequently asked questions (FAQs) prepared by the department on 24th December, 2019.

49. Reverting back to the facts of the present case, we find that on the one hand there is a letter of respondent No. 3 to the petitioner quantifying the service tax liability for the period 1st April, 2016 to 31st March, 2017 at Rs. 47,44,937.00 which quantification is before the cut off date of 30th June, 2019 and on the other hand for the second period i.e. from 1st April, 2017 to 30th June, 2017 there is a letter dated 18th June, 2019 of the petitioner addressed to respondent No. 3 admitting service tax liability for an amount of Rs. 10,74,011.00 which again is before the cut off date of 30th June, 2019. Thus, petitioner's tax dues were quantified on or before 30th June, 2019.

50. In that view of the matter, we have no hesitation to hold that petitioner was eligible to file the application (declaration) as per the scheme under the category of enquiry or investigation or audit whose tax dues stood quantified on or before 30th June, 2019."

14. Subsequently, in M/s. G.R. Palle Electricals v. Union of India, 2020-TIOL-2031-HC-MUM-ST : 2021 (45) G.S.T.L. 10 [LQ/BomHC/2020/1411 ;] ">2021 (45) G.S.T.L. 10 [LQ/BomHC/2020/1411 ;] [LQ/BomHC/2020/1411 ;] (Bom.), this Court held as follows:-

"27. We have already noticed that proprietor of the petitioner in his statement recorded on 11-1-2018 by the investigating authority admitted the service tax liability of Rs. 60 lakhs (approximately) to be outstanding for the period from 2015-2016 to June, 2017. This was corroborated by the departmental authority in the letter dated 24-1-2018 which we have already noted and discussed. Therefore, present is a case where there is acknowledgment by the petitioner of the duty liability as well as by the department in its communication to the petitioner. Thus, it can be said that in the case of the petitioner the amount of duty involved had been quantified on or before 30-6-2019. In such circumstances, rejection of the application (declaration) of the petitioner on the ground of being ineligible with the remark that investigation was still going on and the duty amount was pending for quantification would not be justified.

28. This position has also been explained by the department itself in the form of frequently asked questions (FAQs). Question Nos. 3 and 45 and the answers provided thereto are relevant and those are reproduced hereunder:-

"Q3. If an enquiry or investigation or audit has started but the tax dues have not been quantified whether the person is eligible to opt for the Scheme

Ans. No. If an audit, enquiry or investigation has started, and the amount of duty/duty payable has not been quantified on or before 30th June, 2019, the person shall not be eligible to opt for the Scheme under the enquiry or investigation or audit category. 'Quantified' means a written communication of the amount of duty payable under the indirect tax enactment [Section 121(r)]. Such written communication will include a letter intimating duty demand; or duty liability admitted by the person during enquiry, investigation or audit; or audit report etc. [Para 10(g) of Circular No. 1071/4/2019-CX : , dated 27th August, 2019]."

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"Q45. With respect to cases under enquiry, investigation or audit what is meant by 'written communication' quantifying demand

Ans. Written communication will include a letter intimating duty/tax demand or duty/tax liability admitted by the person during enquiry, investigation or audit or audit report etc."

15. Finally in Saksham Facility Private Limited v. Union of India, 2020-TIOL-2108-HC-MUM-ST : 2021 (47) G.S.T.L. 228 [LQ/BomHC/2020/1473 ;] ">2021 (47) G.S.T.L. 228 [LQ/BomHC/2020/1473 ;] [LQ/BomHC/2020/1473 ;] (Bom.), where a similar issue had cropped up, this Court reiterated the above position and held as under:-

"22.3. Clause (g) of paragraph 10 makes it abundantly clear that cases under an enquiry, investigation or audit where the duty demand had been quantified on or before 30-6-2019 would be eligible under the scheme. The word "quantified" has been defined under the scheme as a written communication of the amount of duty payable under the indirect tax enactment. In such circumstances, Board clarified that such written communication would include a letter intimating duty demand or duty liability admitted by the person during enquiry, investigation or audit etc.

23. Reverting back to the facts of the present case we find that there is clear admission/acknowledgment by the petitioner about the service tax liability. The acknowledgment is dated 27-6-2019 i.e., before 30-6-2019 both in the form of letter by the petitioner as well as statement of its Director, Shri Sanjay R. Shirke. In fact, on a pointed query by the Senior Intelligence Officer as to whether petitioner accepted and admitted the revised service tax liability of Rs. 2,47,32,456.00, the Director in his statement had clearly admitted and accepted the said amount as the service tax liability for the period from 2015-16 upto June, 2017 with further clarification that an amount of Rs. 1,20,60,000.00 was already paid.

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26. Following the above it is evident that the word 'quantified' under the scheme would mean a written communication of the amount of duty payable which will include a letter intimating duty demand or duty liability admitted by the person concerned during enquiry, investigation or audit or audit report and not necessarily the amount crystallized following adjudication. Thus, petitioner was eligible to file the declaration in terms of the scheme under the category of enquiry or investigation or audit as its service tax dues stood quantified before 30-6-2019."

16. From the above, it is evident that all that would be required for being eligible under the above category is a written communication which will include a letter intimating duty demand or duty liability admitted by the person concerned during inquiry, investigation or audit.

17. In so far the present case is concerned, from paragraph Nos. 4, 7 and 9 of the affidavit of the respondents we find that the Director of the petitioner Mr. Lature in his statement made under Section 83 of the Finance Act, 1994 read with Section 14 of the Central Excise Act, 1944 on 24th November, 2016 and 11th May, 2017 had admitted service tax liability of the petitioner for the period under consideration at Rs. 12,24,99,843.00. Such averments have been reiterated in paragraph No. 14 of the reply affidavit wherein it is stated that during the course of investigation the Director had confessed in his statement recorded on 24th November, 2016 and 11th May, 2017 that petitioner had evaded service tax payment and that the service tax liability stood at Rs. 12,24,99,843.00. Such admission was clearly prior to 30th June, 2019, the cut off date.

18. It is another matter that in the declaration petitioner had quantified the duty payable at a slightly lesser amount which in any case would not affect either the tax relief provided under the scheme or the tax dues of the petitioner to be paid under the scheme after availing the tax relief.

19. That apart, in Thought Blurb (supra) we have held that when there is a provision for granting personal hearing in a case where the declarant disputes the estimated amount, it would be in complete defiance of logic and contrary to the very object of the scheme to reject a declaration on the ground of being ineligible without giving a chance to the declarant to explain as to why its declaration should be accepted and relief under the scheme be extended to him. It was held as under:-

"51. We have already discussed that under Sub-sections (2) and (3) of section 127 in a case where the amount estimated by the Designated Committee exceeds the amount declared by the declarant, then an intimation has to be given to the declarant in the specified form about the estimate determined by the Designated Committee which is required to be paid by the declarant. However, before insisting on payment of the excess amount or the higher amount the Designated Committee is required to give an opportunity of hearing to the declarant. In a situation when the amount estimated by the Designated Committee is in excess of the amount declared by the declarant an opportunity of hearing is required to be given by the Designated Committee to the declarant, then it would be in complete defiance of logic and contrary to the very object of the scheme to outrightly reject an application (declaration) on the ground of being ineligible without giving a chance to the declarant to explain as to why his application (declaration) should be accepted and relief under the scheme should be extended to him. Summary rejection of an application without affording any opportunity of hearing to the declarant would be in violation of the principles of natural justice. Rejection of application (declaration) will lead to adverse civil consequences for the declarant as he would have to face the consequences of enquiry or investigation or audit. As has been held by us in Capgemini Technology Services India Limited (supra) it is axiomatic that when a person is visited by adverse civil consequences, principles of natural justice like notice and hearing would have to be complied with. Non-compliance to the principles of natural justice would impeach the decision making process rendering the decision invalid in law."

20. Therefore, on a thorough consideration of the matter, we set aside the order dated 10th February, 2020 and remand the matter back to the designated authority to consider the declaration of the petitioner in terms of the scheme as a valid declaration under the category of "investigation, enquiry and audit" and thereafter, grant the consequential relief(s) to the petitioner. While doing so, respondents shall provide an opportunity of hearing to the petitioner and thereafter, pass a speaking order with due intimation to the petitioner. The above exercise shall be carried out within a period of six weeks from the date of receipt of a copy of this order.

21. Writ petition is accordingly allowed to the above extent. However, there shall be no order as to costs.