Court Directs Designated Committee to Issue Discharge Certificate to SB Aditya Power Projects
The Madras High Court, in a significant ruling, has directed the Designated Committee to revisit its decision regarding the rejection of a CENVAT credit claim made by M/s. SB Aditya Power Projects Private Limited under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS). The court has instructed the committee to issue a discharge certificate based on the petitioner’s declaration within two months.
The petitioner, SB Aditya Power Projects, challenged the rejection of its CENVAT credit claim amounting to Rs. 1,03,71,501. The rejection was based on the committee's erroneous interpretation that the supplies were made to premises other than the registered place of business, a ground not mentioned in the initial show cause notice.
Justice Senthilkumar Ramamoorthy, presiding over the case, emphasized that the Designated Committee failed to adhere to the provisions of the SVLDRS. The court highlighted that the committee's role is to examine and determine the amounts declared by the petitioner, not to embark on an adjudication process.
The court noted that the rejection was contrary to Rule 9 of the CENVAT Credit Rules, 2004, which does not mandate that goods must be delivered to the registered place of business to avail CENVAT credit. The judgment referenced the Allahabad High Court's decision in M/s Cyquator Media Services P. Ltd. v. Union of India, reinforcing that delivery location should not invalidate the credit claim.
Moreover, the court pointed out that the ground for rejection by the committee was inconsistent with the show cause notice, which only questioned the credit claim's timeliness. The High Court had previously set aside an earlier order and remanded the case to verify if the CENVAT credit was validly availed, which the committee again failed to adequately address.
The ruling underscores the necessity for the Designated Committee to act within the SVLDRS framework, allowing for the proper examination of claims rather than introducing new grounds for rejection not stipulated in initial notices.
This decision provides relief to SB Aditya Power Projects, ensuring they can resolve their tax disputes under the scheme as intended. The High Court's directive mandates the issuance of a discharge certificate, facilitating the closure of legacy tax disputes and aligning with the scheme's objectives to clear pending litigations and reduce litigation burden.
The court's decision reflects a commitment to ensuring fair implementation of tax resolution schemes and upholding the rights of businesses to settle disputes without unwarranted procedural hurdles.
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) - Designated Committee erroneously rejected CENVAT credit claim of petitioner contrary to the provisions of the scheme and without adhering to proper examination of the petitioner's declaration.
Statutory provision(s):
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, Section 127; CENVAT Credit Rules, 2004, Rule 9; Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, Section 123.
