2022 (10) TMI 631 - HC - Service Tax

Court directs respondents to accept payment under Sabka Vishwas Scheme, quashing previous order.

The court allowed the petition, directing the respondents to accept the payment of Rs. 38,64,256/- along with interest. The order-in-original dated ... Non-grant of option to pay the amount determined by respondent No.2-Designated Committee formed under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 through online facility - HELD THAT:- It is not in dispute that the petitioner was required to make the payment of Rs. 38,64,256/- as determined in Form SVLDRS-3 and the petitioner tried to make the payment through NEFT on 30.06.2020, however, the same was not accepted by the receiving bank and the payment was returned to the petitioner which is apparent from the bank statement produced on record. It also appears from the record that the petitioner could not generate the challan successfully for making the payment and after the advice of its Chartered Accountant, tried making payment through NEFT/RTGS out of abundance caution and to demonstrate the bona fide of the petitioner to make the payment as determined under the Scheme by respondent No.2 Designated Committee - the petitioner made bona fide attempt to make the payment as determined under the Scheme and is also prepared to pay the amount in question in accordance with the Scheme along with interest for the period for which the petitioner was not permitted to make payment by respondent authorities considering extreme Pandemic condition of Covid-19, it is opined that this is a fit case for invocation of the powers under Article 226 of the Constitution of India. The respondent authorities are directed to accept the payment of Rs. 38,64,256/- as specified in SVLDRS-3 dated 16.03.2020 along with interest @ 9% per annum from 30.06.2020 till the date of payment and grant the benefit of the Scheme to the petitioner - Petition allowed. Issues Involved:1. Non-grant of option to pay the determined amount through online facility under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.2. Quashing of the order-in-original dated 04.01.2021 and letter dated 23.02.2021.3. Petitioner's failure to make payment due to technical glitches and Covid-19 pandemic.4. Applicability of liberal interpretation of the Scheme and invocation of Article 226 of the Constitution of India.Issue-wise Detailed Analysis:1. Non-grant of option to pay the determined amount through online facility under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019:The petitioner, a partnership firm engaged in government road construction, filed a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, declaring tax dues and attempting to pay the determined amount of Rs. 38,64,255.50/-. Due to the Covid-19 pandemic, the petitioner could not make the payment within the stipulated time. Despite attempts to pay through NEFT on 30.06.2020, the payment was returned due to technical issues. The petitioner requested permission to pay via demand draft, which was denied by the respondents.2. Quashing of the order-in-original dated 04.01.2021 and letter dated 23.02.2021:The petitioner sought to quash the order-in-original dated 04.01.2021, which raised a demand of Rs. 1,87,36,448/- under section 73(1) along with interest and penalty, and the recovery notice dated 23.02.2021. The petitioner argued that they had already filed a declaration under the Scheme and attempted to make the payment, which was not successful due to technical issues.3. Petitioner's failure to make payment due to technical glitches and Covid-19 pandemic:The petitioner contended that they made a bona fide attempt to make the payment on 30.06.2020, but it was returned due to technical issues from the receiving bank. The petitioner highlighted the extension of statutory dates for compliance and payments announced by the Central Board of Indirect Tax & Customs amid the pandemic. The petitioner also cited several judicial precedents emphasizing the Scheme's intent to allow defaulters to settle disputes and the need for a liberal interpretation of the Scheme.4. Applicability of liberal interpretation of the Scheme and invocation of Article 226 of the Constitution of India:The court acknowledged the petitioner's bona fide attempt to make the payment and noted that the Scheme's primary objective was to reduce litigation by allowing eligible assessees to pay outstanding dues after availing relief. The court referred to various decisions supporting a liberal interpretation of the Scheme and concluded that the petitioner's inability to make the payment due to technical issues should not deny them the benefit of the Scheme. The court invoked its powers under Article 226 of the Constitution of India, directing the respondents to accept the payment along with interest and grant the benefit of the Scheme to the petitioner.Conclusion:The petition was allowed, and the respondents were directed to accept the payment of Rs. 38,64,256/- along with interest @ 9% per annum from 30.06.2020 till the date of payment. The impugned order-in-original dated 04.01.2021 was quashed and set aside, granting the benefit of the Scheme to the petitioner. The petitioner was ordered to deposit the said amount with interest on or before 15.11.2022.