Bona fide technical failure in VCES payment cannot defeat compliance where dues were later fully paid.

A declarant under the Voluntary Compliance Encouragement Scheme, 2013 was required to pay at least 50% of the declared tax dues by the first due date and the balance by the prescribed date. Where the assessee made a bona fide attempt to remit the balance on time but the online payment link failed because of a technical defect beyond control, and the full dues with interest were paid shortly thereafter, a rigid literal reading of the payment deadline was not justified. The rejection of the declaration was therefore unsustainable and the declaration was liable to be accepted.

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Issues: Whether the declarant's delayed payment of the balance tax dues under the Voluntary Compliance Encouragement Scheme, 2013, caused by a technical failure in the online payment link, justified rejection of the declaration under Section 107(4) of the Finance Act, 1994.

Analysis: The scheme required payment of not less than 50% of the declared tax dues by 31 December 2013 under Section 107(3), and the remaining dues by the prescribed date under Section 107(4). The record showed that the appellant had made the required effort to remit the balance on the due date, but the payment could not be completed because of a technical defect beyond its control. The Department did not produce material to disprove the bona fide nature of the attempt, and the entire amount, including interest, stood paid by 1 January 2015. In these circumstances, a rigid and literal construction of the word "shall" was held to be unjustified on the facts of the case.

Conclusion: The rejection of the VCES declaration was not sustainable; the delay was treated as bona fide and the declaration was liable to be accepted.

Ratio Decidendi: Where a declarant under a compliance scheme has made a bona fide attempt to pay within time but is prevented by a technical failure beyond control, and the dues are fully paid shortly thereafter, the time stipulation may not be applied so rigidly as to defeat the scheme's beneficial object.

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