Sabka Vishwas Scheme payment default can be regularised with interest, with recovery stayed until full compliance.

A voluntary disclosure under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 was treated as capable of being regularised despite non-payment within the prescribed time under section 127(5), where the petitioner later offered to clear the balance with interest. The Gujarat HC noted the departmental objection that the declaration had lapsed, but considered that permitting payment would further the Scheme's object of full discharge of tax dues arising from the disclosure. Relief was therefore moulded by directing appropriation from the attached bank account, requiring any shortfall to be paid within a stipulated period, and keeping the recovery action in abeyance until full compliance.

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Issues: Whether the petitioner, having made a voluntary disclosure under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 but not paid the declared amount within the prescribed time, could still be permitted to discharge the balance with interest and obtain consequential relief against the recovery and garnishee notices.

Analysis: The petitioner had filed a declaration under the Scheme and a statement in Form SVLDRS-3 was issued determining the amount payable. The Court noted the dispute that the amount was not paid within the stipulated period contemplated under section 127(5) of the Scheme and the departmental case that the declaration had lapsed. At the same time, the petitioner came forward to pay the balance amount with interest, and the Court considered that acceptance of such payment would advance the object of the Scheme by enabling full discharge of the tax dues arising from the voluntary disclosure. The Court therefore moulded relief by directing appropriation from the attached bank account, requiring payment of any shortfall within a stipulated period, and ordering that the impugned recovery notice would not be acted upon once full payment was made.

Conclusion: The petitioner was permitted to pay the balance amount with interest, and the recovery notice was kept in abeyance to the extent indicated, with the impugned notice to stand quashed upon full and final compliance.

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