Insolvency moratorium can justify non-payment under Sabka Vishwas Scheme, supporting consequential relief and discharge certificate.

Eligibility under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 is not defeated where the declaration was timely filed and the settlement amount could not be paid within the extended period because the Insolvency and Bankruptcy Code moratorium legally prohibited payment. The note explains that a person cannot be penalised for non-performance caused by a statutory bar, and that such cases call for consequential remedial relief rather than treating the request as an impermissible extension of the Scheme. It also notes that closure of the Scheme and the non-existence of the Designated Committee should not, by themselves, prevent manual or equivalent relief where the declaration had already been processed and the dues determined.

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Issues: (i) Whether the assessee, though otherwise eligible under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, could be denied the benefit merely because the settlement amount was not paid by the extended last date due to the moratorium under the Insolvency and Bankruptcy Code. (ii) Whether the writ court could refuse relief on the grounds that the Scheme had closed and the Designated Committee was not in existence.

Issue (i): Whether the assessee, though otherwise eligible under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, could be denied the benefit merely because the settlement amount was not paid by the extended last date due to the moratorium under the Insolvency and Bankruptcy Code.

Analysis: The assessee had applied within time, the declaration was processed, and Form No. 3 determining the payable amount was issued during the currency of the Scheme. The failure to remit the amount by the extended last date was not due to inaction or negligence, but because the corporate insolvency resolution process and the statutory moratorium prohibited payment during that period. A person cannot be compelled to do what the law itself makes impossible, and a litigant should not be left without a remedy where non-compliance is caused by a legal impediment. The Court treated this as a case for remedial relief rather than an impermissible extension of the Scheme.

Conclusion: The assessee could not be denied the Scheme benefit on account of non-payment within time, since the delay was caused by a statutory bar and not by any fault of the assessee.

Issue (ii): Whether the writ court could refuse relief on the grounds that the Scheme had closed and the Designated Committee was not in existence.

Analysis: The Court held that the matter did not require extension of the Scheme itself. The relief sought was consequential and remedial, especially since the declaration had already been accepted and the amount had been determined. The reasoning that the Designated Committee had ceased to exist was not accepted as a ground to deny relief, particularly where departmental instructions contemplated manual processing in appropriate cases and courts had already granted similar reliefs in analogous situations.

Conclusion: The refusal of relief on the ground that the Scheme had closed and the Designated Committee was unavailable was unsustainable.

Final Conclusion: The assessee was entitled to have the deposited amount appropriated towards the settlement dues under the Scheme and to receive the discharge certificate, as the non-payment within time resulted from a legal impediment rather than any lapse on its part.

Ratio Decidendi: Where timely compliance with a statutory scheme is made impossible by an overriding legal bar such as a moratorium, the affected party cannot be penalised for non-performance, and the court may grant consequential remedial relief without treating it as an impermissible extension of the scheme.

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