Indirect tax dispute settlement scheme challenged again in Bombay High Court


Mumbai: Government’s indirect tax litigation reduction scheme—Sabka Vishwas—that was launched with much fanfare last year, has landed in litigation after a complainant filed a case in Bombay High Court pleading that many taxpayers still have to approach the courts to avail the benefits of the scheme.

The scheme is now challenged in Bombay High Court over not allowing some companies to settle their legacy indirect tax disputes through the scheme.

The scheme offered tax payers settlement of pending central excise and sales tax issues by paying a portion of the tax demanded.

This is the second time the scheme is being challenged in the court.

ET had first reported on October 7 that the scheme was challenged in the Madhya Pradesh High Court.

“The objective of Sabka Vishwas scheme to reduce litigation gets completely defeated when the taxpayers have to again approach the courts for issues”

— Abhishek A Rastogi, Partner at Khaitan & Co

The scheme was introduced in 2019 to free a large number of small taxpayers of their pending disputes with the tax administration.

“The objective of Sabka Vishwas scheme to reduce litigation gets completely defeated when the taxpayers have to again approach the courts for issues such as benefit of interest under the scheme, denial of natural justice, quantification and other frivolous issues”, said Abhishek A Rastogi, Partner at Khaitan & Co, who is arguing the matter in courts.

Tax experts say that there have been various instances when the benefit of the scheme was not extended by the adjudicating authority on some ground. In some cases the claim has been rejected on the grounds that the scheme cannot be applied on tax demands that were made during a certain period.

READ  'Iran has been overplaying its hand': Oil analysts weigh in on US killing of Iranian general

“There have been various instances when the benefit of the scheme was not extended by the adjudicating authority on some ground.”

— Tax experts

The scheme offered tax payers settlement of pending central excise and sales tax issues by paying a portion of the tax demanded. The scheme was brought in to clear the backlog of erstwhile indirect tax disputes.

“The fast closure of cases under the Sabka Vishwas scheme by looking at the provisions harmoniously will help not only in augmenting revenue but also to reduce litigation burden both for taxpayers and the government“, added Rastogi.

India has moved to Goods and Services Tax (GST) since July 1, 2017, and all the other indirect taxes have been subsumed under one umbrella. The intention behind the scheme is to clear the legacy issues so that companies as well as tax officers can focus on GST.

“So far, the scheme has got a positive response. 55,693 applications have been received with tax dispute amounting to Rs 29,557.3 crore”

— Officials

So far, the Sabka Vikas scheme has attracted substantial attention and positive response, officials said adding that 55,693 applications have been received with tax dispute amounting to Rs 29,557.3 crore, PTI reported in December 2019.

In many cases the tax department had even rejected the applications filed by the taxpayers and in certain cases rejected a particular stand taken by them. Sabka Vikas scheme was thought to be a success, and it was replicated to resolve the direct tax disputes as well. The government in the 2020 budget introduced — ‘Vivad se Vishwas– a direct tax dispute settlement scheme.

READ  Facebook says will stop news sharing in Australia if new regulations become law





READ SOURCE

LEAVE A REPLY

Please enter your comment!
Please enter your name here