The HC of Punjab and Haryana in the case of M/s Schlumberger Asia Services Ltd. v. Union of India & Anr. upheld the Constitutional validity of Sec 124 (2) and 130 (2) of the Finance Act, 2019, which was related to the ‘Vivad se Vishwas Scheme’ (VSV).
In the instant matter the petitioner, prior to the show cause notice, paid an amount of Rs. 1,49,35,618/- electronically, out of which a sum of Rs. 1,09,06,948 was deposited under the Accounting code 00441480 as tax receipts & Rs. 40,28,670/- towards interest under Accounting Code 00441481. While the show cause notice was pending, Petitioner requested for change of accounting code also.
During the pendency of the appeal filed by the petitioner before the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), challenging the service tax liability imposed on the petitioner, the Union of India promulgated the Finance Act, 2019 notifying the ‘Vivad se Vishwas Scheme’. The petition filed the requisite declaration under the Scheme for availing the benefit of the Scheme.
Petitioner sorted the relief of adjustment of the amount already paid by them under protest. The Constitutional validity of the above-mentioned sections was challenged, they were discriminatory in nature.
Sec 124 (2) of Finance Act, 2019 “any amount paid as pre-deposit at any stage of appellate proceedings under the indirect tax enactment or as deposit during enquiry, investigation or audit, shall be deducted when issuing the statement indicating the amount payable by the declarant.”
Proviso: if the amount of predeposit or deposit already paid by the declarant exceeds the amount payable by the declarant, as indicated in the statement issued by the designated committee, the declarant shall not be entitled to any refund.