This is a contempt proceeding wherein the petitioner challenged M/s. Cochin Shipyard Ltd. for not settling his service tax liability under the Sabka Vishwas Scheme as per a Court undertaking. The Court found the undertakings concerned only reimbursement upon settlement, not direct settlement, and held the case devoid of merits against contempt.
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR
WEDNESDAY, THE 13TH DAY OF JANUARY 2021 / 23TH POUSHA, 1942
Con.Case(C).No.1527 OF 2020 IN WP(C). 22318/2016
AGAINST THE ORDER/JUDGMENT IN WP(C) 22318/2016(L) OF HIGH COURT OF KERALA
PETITIONER/PETITIONER IN WPC:
THOMAS V.V, AGED 62 YEARS, S/O.LATE V.T.VARGHESE, RESIDING AT VADAKKAL HOUSE, MUPPATHADOM P.O., ALUVA, PROPRIETOR, M/S.TECHS INDIA COMPANY, V/747, EDAYAR, KADUNGALLUR, MUPPATHADOM P.O., ALUVA-683110.
BY ADVS. SRI.JOSE JACOB SHRI.JAZIL DEV FERDINANTO
RESPONDENT/CONTEMNORS/RESPONDENT IN WPC :
1 MADHU S.NAIR, AGE AND FATHERS NAME NOT KNOWN TO THE PETITIONER, PRESENTLY CHAIRMAN AND MANAGING DIRECTOR, M/S.COCHIN SHIPYARD LTD., PERUMANOOR P.O., COCHIN-682015.
2 JOSE V.J., AGE AND FATHERS NAME NOT KNOWN TO THE PETITIONER, PRESENTLY DIRECTOR FINANCE, COCHIN SHIPYARD LTD., PERUMANOOR P.O., COCHIN-682015.
R1-2 BY ADV. SRI.M.GOPIKRISHNAN NAMBIAR R1-2 BY ADV. SRI.K.JOHN MATHAI R1-2 BY ADV. SRI.JOSON MANAVALAN R1-2 BY ADV. SRI.KURYAN THOMAS R1-2 BY ADV. SRI.PAULOSE C. ABRAHAM BY SRI.RAJA KANNAN, STANDING COUNSEL
THIS CONTEMPT OF COURT CASE (CIVIL) HAVING COME UP FOR ADMISSION ON 13.01.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
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Contempt Case (C) No.1527 of 2020
J U D G M E N T
A batch of writ petitions were filed by the contractors of M/s.Cochin Shipyard Ltd. challenging the demand notices issued by the official respondents in the writ petitions claiming service tax payable by them in respect of the works of M/s.Cochin Shipyard Ltd. undertaken by them. The case set out by the petitioners in the writ petitions was that they are not liable to pay the service tax demanded from them and that if at all there is any liability for them, the same have to be borne by M/s.Cochin Shipyard Ltd.
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16.12.2019 undertaking to reimburse to the petitioners the amounts payable by them under the Scheme t owards settlement of their service tax liability, on the petitioners producing evidence of settlement under the Scheme and payment of the settlement amount. Annexure A2 is the affidavit filed on behalf of M/s.Cochin Shipyard Ltd. The case set out by the petitioner in the contempt case is that as the petitioners in the writ petitions were unable to raise the funds required for making payments under the Scheme for settlement of their liability, M/s.Cochin Shipyard Ltd. agreed to effect payment on behalf of the petitioners under the Scheme and accordingly, settled the liabilities of all the petitioners in the writ petitions except the petitioner in the contempt case and a few others. It is stated that payments were not effected on behalf of the petitioner taking the stand that the entire demand for service tax raised against petitioner was not in respect of the works of M/s.Cochin Shipyard Ltd. undertaken by him. According to the petitioner, the said stand is baseless and the entire demand for service tax raised against the petitioner was in respect of the works of M/s.Cochin Shipyard Ltd. undertaken by them and the refusal on the part of M/s.Cochin Shipyard Ltd. to settle the service tax liability of the petitioner would amount to willful breach of Annexure A2 undertaking given to this Court.
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“7. This respondent is willing to reimburse the subcontractors to the extent of the liability they have to pay under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 under the demand notices issued to them for sub-contract works done by them for this respondent and upto an amount of Rs.12,40,10,983/- (Rupees Twelve Crores Forty Lakhs Ten Thousand Nine Hundred and Eighty
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Three) as reported in the statement filed by the petitioners with this respondent as full and final settlement of the entire liabilities under the said demand notices. A true copy of the statements filed by the petitioners summarizing the liability arising of the orders and show cause notices issued by the Department are produced herewith and marked as Exhibits R5(a) and R5(b) for identification. This respondent would clarify that the payments made by the petitioners can be reimbursed only on production of evidence of settlement under the SVLDRS and payment of the settlement amount, by the petitioners, to the department account under the scheme. This respondent would further clarify that it has not and would not assume any further liabilities on the demand notices issued to the petitioners and the amount as stated above shall be reduced and limited to the actual amount payable and paid by the petitioners to the service tax department under the above Scheme, and which is with regard to the works undertaken by the petitioners for this respondent.”
As discernible from the extracted portion of the affidavit, M/s.Cochin Shipyard Ltd. did not undertake before this court to settle the liability of the petitioners in the writ petition. Instead, the undertaking made by M/s.Cochin Shipyard Ltd. is only that they would reimburse to the petitioners the amounts payable by them under the Scheme towards settlement of their service tax liability on the petitioners producing evidence of settlement under the Scheme and payment of the settlement amount. The petitioner has no case that he has settled his service tax liability under the Scheme and M/s.Cochin Shipyard Ltd. is refusing to reimburse to him the amounts paid by him towards settlement of the liability. His case, on the other hand, is only that M/s.Cochin Shipyard Ltd. has
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not settled his liability as done in the case of the petitioners in the remaining writ petitions. I have taken note of the stand taken by M/s.Cochin Shipyard Ltd. for having not settled the liability of the petitioner as done in the case of petitioners in the remaining cases. The case of the petitioner is that the said stand is incorrect and unsustainable. Even if it is accepted that the said stand of M/s.Cochin Shipyard Ltd. is incorrect and unsustainable, according to me, the petitioner cannot be heard to contend that the same would amount to willful breach of Annexure A2 undertaking, so as to constitute a case of civil contempt.
The contempt case, in the circumstances, is devoid of merits and the same is, accordingly, dismissed.
Sd/- P.B.SURESH KUMAR, JUDGE
ds 13.01.2021
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APPENDIX
PETITIONER'S/S EXHIBITS:
| ANNEXURE A1 | A CERTIFIED COPY OF THE INTERIM ORDER DATED 27.11.2019 IN WPC NO.22318/2016 AND CONNECTED CASES. |
|---|---|
| ANNEXURE A2 | A TRUE COPY OF THE AFFIDAVIT DATED 16.12.2019 FILED BY THE COCHIN SHIPYARD LTD., REPRESENTED BY THE 1ST RESPONDENT HEREIN BEFORE THIS HON'BLE COURT PURSUANT TO INTERIM ORDER DATED 27.11.2019, INCLUDING ITS EXHIBITS. |
| ANNEXURE A3 SERIES | TRUE COPIES OF THE FORM SVLDRS-3 ISSUED TO THE PETITIONER. |
| ANNEXURE A4 | A TRUE COPY OF THE EMAIL DATED 30.06.2020 ADDRESSED BY THE OFFICERS UNDER THE CONTROL AND SUPERVISION OF THE CONTEMNOR. |
3 issues framed by the court
Whether the refusal by M/s. Cochin Shipyard Ltd. to settle the petitioner's service tax liability under the Sabka Vishwas Scheme amounts to a willful breach of an undertaking given to this Court and c
Whether the undertaking to reimburse petitioners' liabilities under the Scheme extends to settling liabilities on behalf of petitioners who have not produced evidence of settlement.
Whether the contempt case is devoid of merits given the misunderstanding of the scope of the undertaking.
Thomas V.V
Madhu S.Nair
Jose V.J.
P.B. Suresh Kumar
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
