M/s. BricMor Developers v. Union of lndia

(i) The petitioner v".as a Managing partner of the partnership firm b1, name M/s.BricMor Developers. They started tl-re busine ss of deveiopment of immovable properties rl, wa]: of construction of buildings The respondents rnitiated proceedings against the petitioner alleging non-payment of service tax and issued shou. cause notice, dated 23. 11.2077 u.ith a demand of service tax of Rs.i,48,01, t97 / Thereafter, the matter ,,vers hearcl by the Joint Commissioner, Central Taxes on Og.A2.2O ig and passed the Order in-Original No. O.I. O. No. 20 I 20 IZ - 1 8-Ad3n (JC) ST vide o.R.No.174/20t7-Adjn (JC) ST. (ii) The respondent No.I concluded & confirmed the demar-rd for pa1.ment of service tax for Rs.74,3C,019/_, Rs.11,75.55ri,/, Rs.t,tt,663l and Rs.2,O0.B4gl_ along SP, J & Dr. GRR, J wp_1634a_2O21 u/ith interest, penalty of Rs.10,OOO/-, further penalty of Rs.200/ per day and further 25 "/o penalty on the amounts demanded and for appropriation of Rs.24,44,1.28/ , whrch was already paid against service tax liability. (iii) On 27.O8.2O 19, the Government of India, Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes and Customs issued Circular No.lOTl/412019-CX.B vide F.No.267 l78l2ol9 ICX-Pt.m termed as Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. As per the said scheme, all cases pending for adjudication or appeal (at any Forum), to an extent of 7 O%o of the duty involved are covered, if it was Rs.50,OO,OO0/ or less. Subsequently, another Circuiar No.lO72/0512079-CX dated 25.05.2019 was issued rr.'ith certain amendments and the case of the petitioner $'as covered thereof. As per the subsequent circulars, time was extended for compliance. The Parliament also approved the Amnesty Scheme under the Finance Act, 2019 and the Government notified the same on 21.O8.2O19. The f,rnal date for making the above payment was 30.03.2O20. Under the circular dated 14.07.2O2O, the time was further extended till 30.O9.2O2O. Accordingly on 26.O9.2019, the petitioner made application with respondent No.l under the said scheme to settle their case. On 02.10.2019, the petitioner made online application in Form SLVDRS- 1 against the Order No.20 12A17 18 Adjn (JC) dated O9.O2.2O18. The petitioner received the confirmation dated 18.1O.2019 asking to appear before the designated committee for personal hearing on 22.10.2019. Thereafter, the 4 SP, J & Dr. GRR, J wp.L6348-2O2L confirmatio:t w-as issued to the petitioner in SVLDRS-3 statement i,ide No.L08 1i19SV3O0 140 dated 08.11.2O19, as per whic:l, cut of the total tax amollnt of Rs.87, 17 ,238 /-, a sum of Rs.23.49,244/ r.vas given as relief. The sum already deposited by the petitioner of Rs.28.44,128/- u,as adjusted and an amount of Rs.35,23,866/ '*,as s:ated to be payable by the petitioner. As per the scherne, the petitioner had to pay the balance amount by 31.12.2OI9, u,hich time was subsequently extended riil 30.06.2020.

3. As per the petitioner, rvhlle the petitioner i.\'as making arrangement for payment of the balance amount, COVID-19 pandemic arrived ald the business of the petitioner u,.a.s compJetely closed. There was no inflou, of funds. They could not even meet their regular expenses and cou-ld not generate arry funds. As a bolt fr. om the b1ue, the petitioner, w-ho was looking after the business was infected r,r,ith COVID- 19 along r.r.ith all his famil-r,. members, their health suffered serious setback and he could not even attend to thc office or to look after the business u,ork and as such could not pay the alnount as per the said scheme rvithin the stipuiated time. With great difficulty, the petitioner accumulated funds and paid a sum of Rs.15.00,OO0/- by Demand Draft bearing No.12B0 1O dated OT .O1 .2021 arld lr.' Demand Draft bearing No. l2E02O dated Rs.2O,23,866 /- Ol.O3.2O2l completing the payment of balarlce amount. 5 SP, J & Dr. GRR, J wP_16348_2021

4. In the meanwhile, the respondent No.2 passed order dated

15.O2.2021 attaching personal ProPerty of the director of the Company Sri Nallamilli Srinivas Reddy (the petitioner herein). The petitioner addressed letter to respondent No. 1 on A2.O3.2O21 explaining the facts and requested to raise the attachment. But the said request was not acceded by the respondents. On 15.06.2021, the respondent No'3 issued a letter stating that the department appointed Government Registered Valuer for assessing the vzilue of the property and asked the petitioner to provide the documents of the property. The petitioner rushed to the oflice of the respondents, but, as they refused to hear him, filed the present Writ Petition.

5. Heard Sri Vedula Srinivas, learned Senior Counsel representing Sri Shyam S. Agrawal, learned counsel for the petitioner on record and Ms.D.Pailavi, learned Senior Stalding Counsel for CBIC.

6. Learned Senior Counsel for the petitioner submitted that admittedly the petitioner had already paid the amount ascertained under the scheme. Oniy due to financial problems and other difficulties, he couid not remit the balance amount in time. For the delay, the petitioner could not be subjected to such harsh decision for payment of huge amount. The immovable property belonging to the individual director of the partnel#-p".ry of the petitioner, could not be subjected to attachment as per the provision of the Compalies Act, 6 SP, J & Dr. GRR, J wp L6348 2O2l

1956. The peti:ioner \\,as r-eadv to pay interest amount for the delay tha-t occurred in paying the balance amount, as ascei-tained to be payable by the jrctitioner under the said scheme. Tire COVID- 19 pandemic sitllation made it difficult for the petitionei- to pay the amount thereof and as such pral.ed to direct the respondents to accept the amount paid by' the petitioner tou,ar-is the amount due under the scheme by extending time thereoi an d to raise the attachment.

6.i. Learned Senior Counsel for the petitioner furil:Ler submitted that the petitioner and his partners u,ere facing severe financial crunch having no income from business and that they u,oulC get crippled ald u.ould not be able to survive due to the harsh p,-tnishn'ient imposed upon them. Not only, the petitioner, but also its partners. directors and others depenCing on them rvould be on roads, if ihe Court would not come to their rescue bv directing the responie nts to accept the amount paid tou,ards the amount due under the scheme b1' extending time and prayed t,t a1low the Writ Petition. 6 .2. Learned Senior Counsel placed reliance or.. a judllment of the Apex Court in M/s.Shekhar Resorts Limited (Unit Hotei Orient Taj) 7 SP, J & Dr. GRR, J wp 16348_2O21 w. Union of Indial and urged that the provision of SVLDRS must be liberally interpreted. 7 . Learned Senior Standing Counsei for CBIC submitted that the petitioner failed to pay the amount mentioned in SVLDRS Form - 3 by the due date i.e. 30.06.2020. As such, the recovery proceedings were initiated under Section 87 of the Finance Act, 1994 and notice was issued to the Corporation Balk, Gachiborvli on 09 -O9.2O2O for recovery of dues. Reminder letters issued to Axis Bank and "l,ere Corporation Bank for recovery of dues on 16.12 -2020 (as the accollnts of these banks were disclosed by the petitioner for SVLDRS payment) and to the petitioner M/s. BricMor Developers and M/s. BricMor Westpines for payment of pending dues. As the petitioner failed to pay the amount of Rs.35,23,866/ mentioned in SVLDRS Form - 3 by due date i.e. 30.06.2020, the case was placed under recoverable category of arrears. Accordingli,, the recovery of Rs.15,00,000/- was made by taking action under Section 87 of the Finance Act, 1994 from Union Bank, Gachibowli from the account of the party and a Demand Draft dated 07.O1.2021 along with duly fil1ed GAR 7 challan was submitted to SBI, Treasury Branch, Hyderabad. Further another Demand Draft for Rs.2O,23,866 I dated Ol .O3.2O21 \,vas recovered from Corporation Bank under Section 87 of the Finar-rce Act, 1994 and the sarre was ' ntn zoz: sc z16 8 SP, J & Dr. GRR, J wp 16348_2O21 deposited in SBI Treasury Branch for remittance . Botlr the riemand drafts totalling to Rs.35,23,866 l- got remitted or- 24.O].2A21 in the Go\rernment Acc,tunt after pursuing SBI Treasury Branch. As the amount mentioned in SVLDRS Form - 3 r.vas not paid b,r due date i.e. 30.06 .2020 bv the petitioner, the resoiution mechan ism provided under the scheme and the provrsions of the scher.ne u.ere not applicable to thc petitioner. The part amounts recovercd under Section 87 ol the F inance Act, 1994 coulci not be acjusted under SVLDRS 2019. Further, the Department issued a ierter dated

13.O1 .2021 io the Sub-Registrar Office, Shar-rkai:pa11;,, roquesting the authority not to entertain any transaction in the immov;lble property of Sri N.Srinivas Reddy, the Managing Director ol partner company of the petitioner- ,r\ notice of recovery was also issued to t1'Le partner on i9.O1.2021 and the salne \\/as served in person on 08.02.2O21 and.

25.o2 .2027 resl>erctively- Further action of auctionins was beirrg undertaken b1 tire l)epartment. A Government valLier r,vas alscr appointed vide letter c.No.HQRS/ ARC/21 l2o2o-RR daterl 21 .as.2021 for valuation of the immovable property attached. 7 .1. Learned Senior standing counsel for cBIC further stated that as the petitioner had not made the payment within the stipirlated period under the scherne, he could not avail the benefit of the .scheme. As I i i i I l I l I ; I I 9 SP, J & Dr. GRR, J wp 16348 2O2l such, the acts of the respondents for recovery were in accordance with the provisions of law and prayed to dismiss the Writ Petition.

8. Perused the record. g. As seen from the record, admittedly, the petitioners were due payment of service tax of Rs. l,4S,Ol,l97 I for the period from 2012- 13 to 2016-17. The same was confirmed by the Order in Original passed by the Joint Commissioner (ST), Rangareddy Commissionerate dated 09.o2.2018. The said order was served on the petitioner on

19.O9.20 1B and recovery proceedings r,r'ere initiated under Section 87 of the Finalce Act, 1994 and aI anount of Rs.37,533/- was recovered on 10.03.2019. Meanwhile, the central Government has introduced SVLDRS, 2O19, which came into force on 01.09.2019' In terms of Rule 3 of SVLDRS Rules, 2019 read $'ith Section 125 of the Finance Act, 2019, a declaration shail be made electronically by the declarants in Form SVLDRS 1 on or before 31.12.2019. In terms of Rule 6(2) read with Sections 127(l\ and 127(41 of the Finance Act, 2019, the deciaration made under section 125 shall be verified and statement in SVLDRS Form-3 shall be issued b1' the designated committee electronically within a period of 6o days from the date of receipt of the declaration. In terms of Rule 7 0f the said rules read with Section 127 (5) of the Finance Act, 2019, the declarant shal1 pay electronically through internet banking, the amount payable as indicated in the 10 SP, J & Dr. GRR, J wp_16348-2O2L statement issuecl bv the designated committee *ithin * period of 30 days from the date ol issue of such statement. In terms of Notificatio. No.07/2019 centrai Excise-NT dated 31.72.2o19, an an-Lenclment u,as carried in the Notification No.05/2o19 central Exr:ise NT dared 2L.o8.2019 to extend the due date to 1s.01.2020 ior filing declaration under Rule 3(1) of SVLDRS Rules, 2019 read u,ith Section 125 of the Finanace Act, 2019. In terms of Notification Nc.O1/2 020 Central Excise {N.T) dated r4.05.2o20. Rules 6 and 7 of svLDRS Rules, 2019 were ermended extending the due date to 31.0s.2020 for verification o1' declarations filed and to issue statement of account p"L,abte b1. ihe designated comrr_^ ittee ald to 30.06.2020 for making the payments electronically through internet banking. the arnount payable as indicated in the sivLDRS Form 3 statement issued by' the designated commrttee

10. As per the SVLDRS 2019, the petitioner liled Sabka Vish*,as Scheme applicat..on on 02.1O.2O7g and subsequentlr- SVLDRS Form 3 v;as issued b,r. the designated committee for payment. Tne petitioner had to pay an ainount ol Rs.35,23,g66/ by the due date i.e. br. 30.06.2020. But he failed to pay the said amount bl. tl,e said date. The plea taken by the petitioner was that due to COVID 19 par.rdemic. as the business u as completeiy closed, they couicl not tq enerate anv funds, coulci not nrake payment within the sarcl tine. Hov.e r.er, as per i l SP, J & Dr. GRR, rI wp 15348_2O21 the petitioners they accumulated funds and paid a sum of 17 Rs.15,00,000 l- on07.Ol.2021 and Rs.20,23,866/- on 01.03.2021 and completed the payment of balance amount. 1 i. As per the contention of the learned Senior Standing Counsel for CBIC, as the petitioner failed to make the payment within the stipulated period, the case was placed under recoverable category of arrears and recovery proceedings were initiated and on the letters issued by the Department to the respective banks, the amount was recovered

12. Thus, the amounts recovered were not payments made by the petitioner within the stipulated period, but subsequently by the Department in the process of recovery of arrears. As the petitioner could not comply the terms as mentioned in the scheme and had not made the payments within the stipulated period, the petitioner could not avail the benefit offered under the said scheme. The petitioner u,as required to follow the provisions of the scheme in toto ald to pay the amount determined under SVLDRS Form-3 within the stipulated time in terms of Section 727 $l of the Finance Act, 1994. The recovery made by the Department under Section 87 of the Finance Act, 1994 could not be considered as payment made by the petitioner under SVLDRS scheme. SP, J & Dr. GRR, J wp_L6348 2O2L 13. So far as judgment of the Apex Court in M/s.shekhar Resorts 12 Limited (supra) is concerned, suffice it to say th at ir, para 8. 1 on which heavv reiiance is placed, the Apex Court dealt u,itlt the peculiar fact situation of the said case. The Apex Court recorded as under: "8.1... As obsened hereinab it is a case w-here the appellan t was unable to makc the payment duc to the legal impedimenl and the bar to make the pavment durins the oeriod of moratorium in vteu, of the provisions of r-he iBC (Emphasi:; Supplied)

14. Since therr. \\,as a legat impediment beca,-tse of lrhich thc petitioner the:-ein could not comply rvith the requireixent. irrterference was made.

15. This is trite that a singular different fact/point may change rhe precedential value ci a judgment (see Bhavnagar University Vs. Palitana Sugar Mill (P) Ltd.2). The interference i{ras made bv the Apex Court in the case of M/s.Shekhar Resorts Limited (supra) because the inabiritv of the petitioner therein was arising out of a legal bar unde_r the pror-,isions of [n sohrency and Bankrr,rptcr. Code. The said judgment czt'rnot be stretched and made applicabie in the instant i I CASC. I al00-:J I S(.C ill 13 SP, J & Dr. GRR, J wp_ 16348-2O21

1.6. It is equally settled that the precedential value of a judgrnent relates to a point which has been actually decided and not what is logically flowing from it (see Dr. (Mrs.| Chanchal Goyal v' State of Rajasthana). 17 . As the petitioner was having interest in the firm and became Managing Partner of the firm after entering the recon stituted partnership deed dated 26.09.2015, we do not find any need to interfere vvith the attachment order passed by the Department against the petitioner. As such, we do not find any merit in the contention of the learned Senior counsel for the petitioner to raise the attachment order and to a11orn' the Petition.

18. ln the result, the writ Petition is dismissed. No order as to costs. As a sequel, miscellaneous applications pending in this petition' if any sha1l stand clo-sed '2oo3( 3) sce 485 s D/.K. SREE RAMA MURTHY ASSIS ANT REGTSTRAR //TRUE COPY// TION OFFI CER To, I 2 3 3ffi 333 fiS',:EXiSii &t"'"S'?t"J33t) toPucl . Two CD CoPies BM BS l l I ! I I i I 1 I I I I I i I I I I i I { i I i i I I HIGH COURT DATED:0810112025 ORDER WP.No.16348 ot 2021 q i tlii ,'i1 ?tA ;l o \ DE:ri,A1 c DISMISSING THE WRIT PETITION WITHOUT COSTS , I