SVLDR discharge certificate allowed: "tax dues" include remanded SCNs and redemption fines; s.125(1)(a) and s.124(2) applied

HC allowed the petition and directed issuance of the discharge certificate under the SVLDR Scheme. The Court held that "tax dues" include duty demands raised by pending SCNs remanded for fresh adjudication, and petitioners were not ineligible under s.125(1)(a). Redemption fine imposed for release of seized goods is a consequence of non-payment of excise duty and falls within duty/penalty covered by the Scheme; separate mention was unnecessary. Pre-deposits at appellate stage are deductible under s.124(2) with no refund. The Scheme's waiver of penalties and interest must include redemption fines to give finality to disputes.

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ISSUES PRESENTED AND CONSIDERED

1. Whether "redemption fine" (fine in lieu of confiscation under the Central Excise Act) falls within the ambit of "duty, interest or penalty" or otherwise forms part of "tax dues/amount payable" under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme), so as to be covered by waiver/immunity on payment of the scheme-prescribed amount.

2. Whether a bona fide attempt to pay the amount determined under the SVLDR Scheme on the last date, frustrated by a technical glitch in the online portal but reflected as paid subsequently, entitles the declarant to benefit of the Scheme (including issuance of discharge certificate) despite respondent contention of time-bar/non-payment.

3. Consequential issue: Whether, once the SVLDR Scheme liability is settled and payment accepted/treated as paid, the Department may proceed with de novo adjudication of a previously remanded show cause notice relating to the same period and matter.

ISSUE-WISE DETAILED ANALYSIS - Issue 1: Whether redemption fine is covered by SVLDR Scheme

Legal framework: The SVLDR Scheme defines key terms: "amount in arrears", "amount of duty", "tax dues" and prescribes relief in Section 124, issuance of statement by the designated committee and issuance of discharge certificate under Section 127/129. Section 129(1)(a) provides that upon discharge certificate the declarant "shall not be liable to pay any further duty, interest, or penalty" for the matter/time period covered.

Precedent treatment: Multiple High Court decisions (including Gujarat, Allahabad, Punjab & Haryana, Bombay and coordinate benches) have considered whether redemption fine is a "penalty" or part of "amount in arrears" and, in substance, have held that redemption fine is a species of penalty or forms part of the amount consequential to non-payment of duty and therefore falls within the ambit of the Scheme's waiver. These decisions were followed in the present judgment. Authorities rejecting one-day/technical delays on strict timeline grounds have been noted but distinguished on facts.

Interpretation and reasoning: The Court analyses statutory language of SVLDR Scheme and the Central Excise Act (Sections 12F, 34). It reasons that redemption fine is imposed as an alternative to confiscation and is a consequence of non-payment of excise duty; thus it is not a separate species that can be carved out of the scheme's relief. The Court relies on (a) the statutory scheme of Central Excise which links confiscation/redemption fine to non-payment, (b) SVLDR Scheme definitions which target legacy tax dues arising from show cause notices, and (c) contemporaneous administrative material (CBIC flyers/FAQs) stating "total waiver of interest, penalty and fine" and promising immunity. The Court holds that excluding redemption fine from waiver would defeat the Scheme's purpose of finality and dispute resolution. The reasoning emphasises that where the legislature or administering authority has not expressly excluded redemption fine, the plain language and object of the Scheme support inclusion.

Ratio vs. Obiter: Ratio - Redemption fine, being a payment in lieu of confiscation under the Central Excise Act, is a form of penalty/part of tax dues consequent to non-payment of duty and is covered by the waiver and immunity provisions of the SVLDR Scheme upon compliance with payment obligations under the Scheme. Obiter - Observations on policy considerations about taxpayers' reliance on CBIC FAQs and publicity material, and comparative discussion of divergent High Court decisions.

Conclusions: The Court concludes that redemption fine is covered by the SVLDR Scheme's waiver; discharge certificate must be issued upon payment as determined by the designated committee; seizure/confiscation matters are within the Scheme and cannot be kept pending by insisting on a separate redemption fine payment beyond the Scheme settlement.

ISSUE-WISE DETAILED ANALYSIS - Issue 2: Payment attempt frustrated by technical glitch - entitlement to benefit

Legal framework: SVLDR Scheme prescribes timelines for payment (last date referenced by CBIC/notifications) and Section 127(8) contemplates issuance of discharge certificate on payment and proof of withdrawal of appeal. The Court also applies principles of fairness where impossibility or external impediment prevents compliance.

Precedent treatment: Decisions acknowledging extraordinary circumstances (e.g., moratorium under IBC or pandemic-related obstacles) and permitting remedial relief where payment could not be made despite bona fide attempts were relied upon by the petitioner; other authorities insisted on strict adherence to scheme timelines. The Court applies precedents that permit relief where non-compliance was due to factors outside the declarant's control and where payment was thereafter accepted/recorded.

Interpretation and reasoning: The Court reviews the factual matrix: the declarant attempted payment on the last operative date; portal errors (HTTP 404, ICEGATE problems), helpdesk communications acknowledging ticket and delay, and later system records showing the amount as "PAID" in Track Challan Status and taxpayer summary. The Court reasons that where a taxpayer makes bona fide, demonstrable efforts and the failure is caused by departmental or technical glitches, it is inequitable to deny Scheme benefits - particularly where the Scheme's object is dispute resolution and finality. The Court distinguishes cases upholding strict timelines on facts where no such external impediment was established.

Ratio vs. Obiter: Ratio - A bona fide attempt to pay on the last date which is frustrated by a technical glitch, with subsequent administrative acceptance/recording of payment, entitles the declarant to SVLDR benefits; the Department cannot deny the benefit where payment is effectively accepted and reflected. Obiter - Comments on helpdesk responses and expectations from CBIC communications.

Conclusions: The Court finds the petitioner made bona fide attempts; the payment is reflected as paid; therefore the petitioner is entitled to benefit of the Scheme and issuance of the discharge certificate.

ISSUE-WISE DETAILED ANALYSIS - Issue 3: Whether de novo adjudication may proceed after settlement under SVLDR Scheme

Legal framework: Section 129(1) makes a discharge certificate conclusive as to the matters/time period covered: declarant shall not be liable to pay any further duty, interest or penalty and shall have immunity from prosecution; subsection (2) preserves Department's ability to proceed for subsequent periods or different matters but not to reopen the same matter/time period.

Precedent treatment: Courts interpreting Section 129 have held that discharge certificates provide finality for the specified matter/time period and preclude re-adjudication on the same dispute once Scheme obligations are complied with.

Interpretation and reasoning: Given the Court's conclusions on Issues 1 and 2 (redemption fine included; payment accepted), the Scheme payment settles the demand. Consequently, de novo adjudication of the remanded SCN relating to the same matter/time period would be inconsistent with the conclusive effect of a discharge certificate under Section 129(1). The Court therefore holds that the Department must not proceed with de novo adjudication and personal hearing notices are set aside.

Ratio vs. Obiter: Ratio - Once Scheme payment is made and discharge certificate issued, the Department cannot proceed with de novo adjudication of the same matter/time period covered by the Scheme. Obiter - None significant beyond statement of statutory effect.

Conclusions: The Department shall not proceed with de novo adjudication; issue discharge certificate within stipulated period; personal hearing notices set aside.

OVERALL CONCLUSION

The Court holds that redemption fine is encompassed within the SVLDR Scheme's waiver/immunity provisions (as a type of penalty/part of tax dues arising from non-payment of duty); a bona fide attempt to pay on the last day frustrated by technical portal failures but evidenced by subsequent system acceptance entitles the declarant to Scheme benefits; and once settled under the Scheme, the matter cannot be reopened by de novo adjudication for the same period and subject matter - accordingly the discharge certificate must be issued.

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