Taxpayer wins relief under Direct Tax Vivad Se Vishwas Act despite COVID-related payment delay

The Telangana HC allowed a writ petition challenging denial of benefits under the Direct Tax Vivad Se Vishwas Act, 2020. The petitioner had paid 75% of the tax amount by the deadline and cleared the remaining 25% within 60 days during COVID pandemic period. Following precedents from Rajasthan HC and Delhi HC, the court held that the delay was bona fide given pandemic circumstances and the petitioner's genuine intent to pay. The court directed respondent to issue Form 5 under the scheme, requiring petitioner to pay interest for the delayed period within 30 days.

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Issues:
The judgment deals with the issuance of Form 5 under the Direct Tax Vivad Se Vishwas Act, 2020 and the delay in payment of tax by the petitioner during the COVID-19 pandemic period.

Summary:

Issue 1: Delay in Payment of Tax
The petitioner sought a direction for the issuance of Form 5 under the Direct Tax Vivad Se Vishwas Act, 2020. The petitioner had to make a payment of Rs. 1,10,35,340 by 31.03.2021 and Rs. 1,21,38,874 by 31.10.2021 with interest. Due to the COVID-19 pandemic, the petitioner managed to pay 75% of the total amount by 31.10.2021 and the remaining 25% by 31.12.2021. The respondent refused to issue Form 5 citing lack of power beyond the cutoff date, leading to the writ petition.

Issue 2: Precedents and Legal Interpretation
The High Court of Rajasthan and the High Court of Delhi, in separate cases, allowed writ petitions under similar circumstances. They emphasized the broad jurisdiction of Article 226 of the Constitution to grant relief in exceptional circumstances. The courts highlighted the need to consider genuine hardship faced by taxpayers and the objective of reducing litigation.

Decision:
Considering the petitioner's efforts to pay the outstanding amount within a reasonable time despite the pandemic challenges, the High Court allowed the writ petition. The court directed the respondent to issue Form 5 promptly upon the petitioner's payment of the extra interest for the delayed period. The judgment aligned with previous decisions emphasizing substantial justice and the objectives of the Vivad Se Vishwas Act.

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