Bombay HC quashes SVLDRS rejection for one-day payment delay due to banking glitch during COVID-19

Bombay HC allowed a petition challenging rejection of SVLDRS application where payment was delayed by one day due to technical banking glitch. Following Gujarat HC precedent in M/S LG Chaudhary case, court held that petitioner's bona fide attempt to make payment within stipulated period could not be denied substantive benefit of Sabka Vishwas Scheme on procedural technicalities, particularly during COVID-19 pandemic. The rejection order dated 16th December 2022 was quashed and set aside, with court finding violation of natural justice principles as no hearing opportunity was provided to petitioner.

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Issues Involved:
1. Validity of rejection of the Petitioner's application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 due to delayed payment.
2. Whether a bona fide attempt to make payment under the Scheme can be considered valid despite procedural delays caused by technical glitches.

Summary:

Issue 1: Validity of rejection of the Petitioner's application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 due to delayed payment.

The Petitioner, a private limited company engaged in construction services, filed a petition under Article 226 of the Constitution of India challenging the rejection of their application under the Sabka Vishwas Scheme. The Respondents initiated an enquiry for the period April 2012 to June 2017, leading the Petitioner to pay part of the service tax liability. The Petitioner filed Form SVLDRS-1 under the Scheme, declaring tax dues, but the application was initially rejected without a hearing. Upon remand by the High Court, the Respondents issued Form SVLDRS-3 directing the Petitioner to deposit Rs. 6,51,360/-. Due to an online banking issue, the Petitioner made the payment one day late, which led the Respondents to reject the application again. The Petitioner sought quashing of this order and acceptance of the belated payment.

Issue 2: Whether a bona fide attempt to make payment under the Scheme can be considered valid despite procedural delays caused by technical glitches.

The Petitioner argued that the delay was due to a bona fide technical glitch in the internet banking system. The Court considered precedents, including the Gujarat High Court's decision in L.G. Chaudhary vs. Union of India and its own decision in Innovative Antares Pvt. Ltd. vs. Union of India, which supported the acceptance of late payments caused by technical issues. The Respondents contended that adherence to the Scheme's terms was mandatory, citing the Supreme Court's order in Yashi Constructions vs. Union of India. However, the Court distinguished this case, noting that the Petitioner made a bona fide attempt to pay on time but was prevented by technical issues.

Judgment:

1. The Court quashed the order dated 16th December 2022, rejecting the Petitioner's SVLDRS-1 application.
2. The Respondents were directed to accept the payment of Rs. 6,51,360/- made on 19th November 2022 and issue the SVLDRS-4 Discharge Certificate to the Petitioner.
3. The Court emphasized that bona fide attempts to comply with the Scheme should not be penalized due to procedural technicalities, especially when technical glitches are involved.
4. The writ petition was disposed of with no order as to costs.

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