Court directs acceptance of tax payment, issues discharge certificate, and quashes penalty under Sabka Vishwas Scheme.

The High Court of Calcutta, in a judgment delivered by Hon'ble Justice Bibek Chaudhuri, allowed the writ petition filed by the petitioners. The court directed the respondents to accept the tax payment made by the petitioners on 30th June 2020, issue the discharge certificate in their favor, and quash the penalty imposition of Rs. 12,15,185. The court emphasized the importance of adherence to timelines and procedural requirements under the Sabka Vishwas Scheme, ensuring fair treatment of taxpayers seeking relief under such schemes.

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Issues:
1. Non-issuance of discharge certificate under Sabka Vishwas Scheme.
2. Penalty imposition and recovery for alleged delay in tax payment.
3. Interpretation of relevant notifications and rules.
4. Obligation of taxpayers under the Sabka Vishwas Scheme.
5. Legal validity of penalty imposition by the authorities.

Issue 1: Non-issuance of discharge certificate under Sabka Vishwas Scheme
The petitioners, a partnership firm, were aggrieved by the respondent's failure to issue a discharge certificate in Form SVLDRS-4 within the stipulated 30 days under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The petitioners had paid a significant portion of their tax dues but were penalized for an alleged delay, leading to recovery of a substantial amount from their bank account.

Issue 2: Penalty imposition and recovery for alleged delay in tax payment
The petitioners argued that they had paid the remaining tax amount within the extended deadline of 30th June 2020, as per the provisions of the relevant ordinances and notifications. Despite a technical glitch causing a one-day delay in crediting the amount to the respondent's account, a hefty penalty was imposed unilaterally, amounting to Rs. 12,15,185, which the petitioners contested as arbitrary and illegal.

Issue 3: Interpretation of relevant notifications and rules
The court analyzed the notifications issued by the Central Government, specifically the Taxation and other Laws (Relaxation Certain Provisions) Ordinance, 2020, and subsequent amendments to the Sabka Vishwas Scheme rules. The amendments clarified the deadline for tax payment under the scheme, emphasizing the importance of adherence to the revised timelines for availing benefits and avoiding penalties.

Issue 4: Obligation of taxpayers under the Sabka Vishwas Scheme
The court highlighted the importance of strict compliance with the terms and conditions of the Sabka Vishwas Scheme, emphasizing that taxpayers seeking relief under such schemes must adhere to the prescribed timelines and procedures. The judgment underscored the significance of timely payments and electronic transfers to ensure seamless processing of tax liabilities under the scheme.

Issue 5: Legal validity of penalty imposition by the authorities
In assessing the legality of the penalty imposition and recovery by the authorities, the court referred to relevant case laws, including decisions by the Hon'ble Supreme Court and High Courts. The court ruled in favor of the petitioners, emphasizing that the retrospective effect of procedural law amendments must be considered, and the penalty imposed for the delayed payment was unjustified due to the technical glitch causing the delay in crediting the tax amount.

In conclusion, the High Court of Calcutta, in a judgment delivered by Hon'ble Justice Bibek Chaudhuri, allowed the writ petition filed by the petitioners. The court directed the respondents to accept the tax payment made by the petitioners on 30th June 2020, issue the discharge certificate in their favor, and quash the penalty imposition of Rs. 12,15,185. The court emphasized the importance of adherence to timelines and procedural requirements under the Sabka Vishwas Scheme, ensuring fair treatment of taxpayers seeking relief under such schemes.

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