Full Text
HIGH COURT OF DELHI
Date of Decision: 16th December, 2025
VARNER RETAIL SERVICES SOUTH ASIA PVT.
LTD. .....Petitioner
Through: Mr. Sunil Agarwal, Mr. Utkarsh Tiwari, Mr. Anurag Dwivedi, Mr. Ashutosh Mohan Rastogi, Advs.
GOODS AND SERVICE TAX (DELHI SOUTH)
& ORS. .....Respondents
Through: Mr. Aditya Singla, SSC CBIC
JUDGMENT
1. This hearing has been done through hybrid mode.
2. The present petition has been filed challenging the impugned order dated 30th June, 2023 passed by the Assistant Commissioner Division- Okhla, Central Goods and Service Tax (Delhi South) (hereinafter, 'the impugned order') by which a demand of service tax to the tune of Rs. 46,86,276/- under Section 73(2) of the Finance Act, 1944, has been confirmed against the Petitioner, along with certain penalties under Section 76(1) and Section 77(2) of the Finance Act, 1944. The petition also challenges the order dated 2nd March, 2020 passed by the Designated Committee, Sabka Vikas Legacy Dispute Resolution Scheme (hereinafter, 'SVLDR Scheme')
3. The petition has a history that deserves to be captured in the present order. During March to December, 2017 the Petitioner had filed certain refund applications under the CENVAT Credit Rules, 2004, for accumulated/ unutilised CENVAT credit. The credit being sought by the Petitioner was for the following period: Sr. No. Period Under Notification No. Due Date for filing of Refund Claim (One Year from the receipt of consideration) Date of Date of filing of Refund Claim Claimed Amount (in ‘Rs.’) 1 January 2016 to March 27/2012 20.04.2017 29.03.2017 1,81,386/- 2 April 2016 to June 2016 27/2012 27.06.2017 17.04.2017 1,42,915/- 3 October 2016 to December 27/2012 31.10.2017 13.07.2017 2,49,731/-
4. January 2017 to March 27/2012 19.04.2018 13.07.2017 1,51,468/-
5. April 2017 to June 2017 27/2012 22.06.2018 19.12.2017 1,70,076/- Total 8,95,576/-
4. The said CENVAT credits were rejected on 7th September, 2018 by the Department for the entire period.
5. A show cause notice dated 18th October, 2018 (hereinafter, ‘SCN-I’) was the issued to the Petitioner, raising a demand of service tax amounting to Rs. 33,64,946/-. The period covered in the said SCN-I was October, 2015 to September, 2016. The said SCN-I was issued on the premise that the services rendered by the Petitioner do not qualify as ‘export of services’.
6. The Petitioner also challenged the Order in Original dated 7th September, 2018, before the Commissioner of Central Excise (Appeals) wherein it was held vide order dated 6th March, 2019 that the Petitioner’s services cannot be treated as export of services as the Petitioner was held to be an intermediary. This order of the Commissioner of Central Excise (Appeals) was challenged before CESTAT and the prayer before CESTAT was to quash the demand and to allow the refund claim of Rs. 8,95,576/-.
7. In the meantime, the Government announced the SVLDR Scheme on 1st September, 2019. The Petitioner, wishing to take advantage of the said Scheme, filed an application in respect of SCN-I under the Scheme. In respect of the said first application, the Department accepted the application of the Petitioner on 31st December, 2019, and relief of Rs. 23,55,462/- was granted to the Petitioner.
8. In the meantime, a second SCN was issued on 19th December, 2019 (hereinafter, ‘SCN-II’) for the following two periods: ● October, 2016 to March, 2017; ● April, 2017 to June, 2017.
9. The Petitioner then filed another application under the SVLDR Scheme with regard to SCN-II. This was, however, rejected by the impugned order dated 2nd March, 2020 on the following grounds: “The impugned SCN has been issued on 18.12.2019 (which is beyond the stipulated date prescribed in the Scheme) and is pending for adjudication.”
10. In the meantime, SCN-II also got adjudicated vide the impugned order dated 30th June, 2023 wherein the demand of Rs. 46,86,276/- along with interest and penalty has been confirmed against the Petitioner.
11. The case of the Petitioner is that the rejection of the application filed with respect to SCN-II under the SVLDR Scheme is incorrect, inasmuch as, as per Mr. Aggrawal, though the cut off date under the scheme is 30th June, 2019 and the SCN-II was issued on 19th December, 2019, the said SCN-II was merely a continuation of SCN-I itself. According to ld. Counsel, SCN-II was not a fresh proceeding since it arose out of the same first SCN-I wherein the entire refund which was claimed by the Petitioner was captured in SCN-
12. It is his further submission that under the CBIC CIRCULAR NO. 1074/07/2019-CX dated 12th December, 2019, the applications filed under the SVLDR Scheme post 1st July, 2019 could also be entertained. In this regard, reliance is placed upon Clause 2 paragraph (v) and paragraph (viii) of the said circular dated 12th December, 2019. It is also his submission that since the refund claim was for the entire period but the Department chose to divide the same into two SCNs, the Petitioner cannot be deprived of the benefit of the SVLDR Scheme.
13. Mr. Singla, ld. Counsel, on the other hand, submits that Clause 2(viii) of the Circular dated 12th December, 2019 would only apply if the amount is quantified and the arrears are either pending consideration in an appeal or the appeal has attained finality or the Petitioner gives an assurance that further appeal would not be filed. However, in cases where the SCN itself is dated subsequent to the deadline under the SVLDR Scheme, the Scheme would not be applicable.
14. The Court has considered the matter. At the outset, upon a perusal of the SVLDR Scheme, the following definition is relevant:
(e) where an amount in arrears relating to the declarant is due, the amount in arrears.”
15. In the present case, the SCN-II is dated 19th December, 2019. However, the SVLDR Scheme itself prescribes the cut off date as 30th June, 2019. In the facts of this case, the initial enquiry which had taken place was in respect of the refund application which was filed by the Petitioner. The amount contained in SCN-I, which was proposed to be demanded from the Petitioner was not quantified as on 30th June, 2019. It is only in SCN-II that the amounts came to be quantified. The SCN-II mentions the details of the SCN-I in the following manner:
16. The mere fact that the SCN-II makes a reference to SCN-I would not mean that the Petitioner would get a chance to apply under the SVLDR Scheme with respect to SCN-II as well, when admittedly SCN-II was issued subsequent to the SVLDR Scheme being launched and subsequent to the deadline which is mentioned in the Scheme. Further, the fact that SCN- I is one of the relied upon documents in SCN- II would also not help the Petitioner’s case either.
17. In the opinion of this Court, SCN-II is not to be considered as a continuation of SCN-I or the refund proceedings.
SCN-II stood on its own legs, as the demand was quantified in SCN-II resulting in the adjudication order dated 30th June, 2023. The rejection of the application pertaining to SCN-II under the SVLDR Scheme cannot, therefore, be faulted as the SCN- II itself was issued post the due date.
18. Further, the CBIC has also issued clarifications in the form of answers given to FAQs with respect to the SVLDR Scheme. In the said FAQs, Question No.1 reads as under: “Q[1]. Who is eligible to file declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019? Ans. Any person falling under the following categories is eligible, subject to other conditions, to file a declaration under the Scheme: (a) Who has a show cause notice (SCN) for demand of duty/tax or one or more pending appeals arising out of such notice where the final hearing has not taken place as on 30.06.2019. (b) Who has been issued SCN for penalty and late fee only and where the final hearing has not taken place as on 30.06.2019.
(c) Who has recoverable arrears pending.
(d) Who has cases under investigation and audit where the duty/tax involved has been quantified and communicated to him or admitted by him in a statement on or before 30th June,
2019. (e) Who wants to make a voluntary disclosure.”
19. Thus, the SCNs issued beyond the deadline prescribed in the Scheme itself cannot be considered for benefits under the Scheme. In the overall facts and circumstances, the benefit of this SVLDR Scheme cannot be extended to the Petitioner with respect to SCN–II.
20. However, considering the fact that the writ petition has remained pending before the Court since September, 2023, the Petitioner cannot be deprived of its remedies in accordance with law. Accordingly, the Petitioner is permitted to file an appeal against the impugned order dated 30th June, 2023, by 31st January, 2026.
21. If the said appeal is filed by 31st January, 2026, the appeal shall not be dismissed on the ground of limitation and shall be adjudicated on merits.
22. The petition is disposed of in these terms. Pending applications, if any, are also disposed of.
PRATHIBA M. SINGH JUDGE SHAIL JAIN JUDGE DECEMBER 16, 2025 dj/ss