Petitioner wins Form 5 issuance under Direct Tax Vivad se Vishwas Act despite Rs 1,533 late payment

Gujarat HC allowed petitioner's claim under Direct Tax Vivad se Vishwas Act, 2020 for Form 5 issuance. Petitioner paid almost entire amount within deadline of 30th September 2021, with only Rs. 1,533 paid twelve days late due to unintentional delay with justifiable reason. Court found rejecting Form 5 issuance would deny substantial justice since petitioner substantially complied with scheme requirements. HC quashed respondent's rejection order dated 16.03.2023 and directed issuance of Form 5 within twelve weeks, noting petitioner also paid additional Rs. 2,00,634 as difference amount.

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Issues Involved:

1. Compliance with the Direct Tax Vivad se Vishwas Act, 2020 (DTVSV Act) and the implications of late payment.
2. Entitlement to the issuance of Form 5 under the DTVSV Act.
3. Interpretation of statutory schemes and the scope of judicial discretion in condoning delays.

Detailed Analysis:

1. Compliance with the Direct Tax Vivad se Vishwas Act, 2020 (DTVSV Act) and the implications of late payment:

The central issue in this case revolved around the petitioner's compliance with the payment requirements under the DTVSV Act. The petitioner, a Private Limited Company, initially paid Rs. 12,27,183/- on 27th August 2021, which was slightly short of the Rs. 12,28,500/- due by 30th September 2021. The shortfall of Rs. 1,533/- was paid on 12th October 2021, a delay of twelve days. The respondent contended that this delay disqualified the petitioner from the benefits of the DTVSV Scheme, which aims to resolve disputed taxes and reduce litigation. The court noted that the DTVSV Act is a beneficial legislation intended to expedite tax dispute resolutions and reduce administrative burdens. The court emphasized that the petitioner's delay in paying the Rs. 1,533/- was not substantial enough to justify denying the benefits of the Scheme, especially given the petitioner's subsequent payment of Rs. 2,00,634/- on 09.12.2022 to demonstrate compliance.

2. Entitlement to the issuance of Form 5 under the DTVSV Act:

The petitioner sought the issuance of Form 5, which signifies the completion of payment obligations under the DTVSV Act. Despite the late payment, the petitioner argued that they had complied substantially with the Scheme's requirements and that the delay was neither deliberate nor significant. The court agreed, citing the objective of the DTVSV Act to resolve tax disputes efficiently and effectively. It was observed that the petitioner had paid more than 90% of the required amount on time and had shown bona fide intent by making the additional payment. The court quashed the respondent's order denying Form 5 and directed its issuance, recognizing the petitioner's substantial compliance with the Scheme.

3. Interpretation of statutory schemes and the scope of judicial discretion in condoning delays:

The court considered various precedents where minor delays or shortfalls in payment under similar statutory schemes were condoned. It referenced decisions from the Bombay, Delhi, and Telangana High Courts, which emphasized that minor, unintentional lapses should not obstruct the benefits intended by such schemes. The court highlighted that the DTVSV Act, being a remedial statute, should be interpreted liberally to fulfill its purpose. The court also acknowledged its power under Article 226 of the Constitution to remedy injustices in extraordinary circumstances. It concluded that the petitioner's delay was unintentional and supported by justifiable reasons, warranting the condonation of the delay and the issuance of Form 5.

Conclusion:

The court ruled in favor of the petitioner, emphasizing the need for a liberal interpretation of the DTVSV Act to achieve its objectives. It directed the issuance of Form 5, allowing the petitioner to benefit from the Scheme despite the minor delay in payment. The decision underscores the judiciary's role in ensuring that beneficial legislative schemes are not thwarted by rigid procedural adherence, especially when the delay is minimal and unintentional.

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