2025 (11) TMI 298 - HC - VAT / Sales Tax

Quashed rejection of Vera Samadhan Yojna application; two-day delay due to portal glitch condoned, applicant to be accepted.

M/s. Kamnath Private Ltd. Versus State Tax Officer

HC allowed the petition, quashing and setting aside the order rejecting the petitioner's application under the Vera Samadhan Yojna. The court found the ... Rejection of application filed by the petitioner under “Vera Samadhan Yojna” under the provisions of Gujarat Value Added Tax Act, 2003 - rejection on the ground that there was delay of two days in depositing last installment - HELD THAT:- It is an admitted position that the petitioner has paid the first five installments within time limit. The petitioner was also on the verge of paying the last installment on time. However, due to some technical issue on the online Portal, the petitioner was not able to make payment of differential amount of Rs. 34,102/-. It is an uncontroverted fact that after paying substantial amount, the petitioner was required to pay remaining amount of 34,102/-. Even attempts were made by the petitioner to pay the differential amount which was short on record. It was only due to technical glitches of the online portal, the amount was paid after delay of 2 days. There was a clear and unequivocal intention of the petitioner to avail the Scheme and this fact is not disputed by the respondent. The order dated 7.10.2021 rejecting the application of the petitioner under the Amnesty Scheme is hereby quashed and set-aside. The delay of 2 days in making the payment in the aforesaid Scheme is condoned - Petition allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether an application under an amnesty/amendment scheme can be rejected where the assessee pays the substantial part of the settlement and is late by two days in depositing the final installment due to technical glitches on the administering authority's online portal. 2. Whether the Court in writ jurisdiction under Article 226/227 can condone brief, inadvertent delay in payment relating to an amnesty scheme and direct acceptance of payment despite statutory or scheme provisions not expressly conferring condonation power on the authority. 3. How prior judicial decisions concerning amnesty/settlement schemes, short delays and extraordinary writ jurisdiction (including decisions allowing late deposit subject to conditions) should inform the exercise of the Court's discretion in favour of the assessee. ISSUE-WISE DETAILED ANALYSIS Issue 1: Validity of rejection of amnesty application for two-day delay caused by technical glitches Legal framework: The amnesty scheme required full payment by a specified date to obtain settlement benefits; non-compliance with the deadline led to rejection under departmental action and consequential enforcement (freeze of bank account, lien). The scheme's objective is to resolve old disputes, expedite recoveries and reduce administrative costs. Precedent Treatment: Decisions of this Court and other High Courts have treated the object of amnesty schemes as paramount and have not been strictly mechanical where genuine inadvertence or technical impediments prevented timely compliance; reliance was placed on authoritative appellate precedent permitting relief in analogous short-delay contexts. Interpretation and reasoning: The Court accepted as uncontroverted that substantial instalments were paid within time and that the remaining shortfall arose from unilateral readjustment by the online portal followed by inability to reconcile e-payments with the scheme due to technical errors. There was demonstrable, unequivocal intention to comply and contemporaneous attempts to make payment. The rejection for a mere two-day delay was considered arbitrary and contrary to the scheme's object of effective resolution and revenue realisation. Ratio vs. Obiter: Ratio - where substantial compliance with an amnesty scheme has been effected and only a de minimis delay (two days) arises from technical faults beyond the taxpayer's control, rejection of the application frustrates the scheme's object and can be set aside. Obiter - reference to the specific quantum of shortfall and the portal-readjustment mechanics serve as factual illustration rather than prescriptive limits for all cases. Conclusion: The Court quashed the order rejecting the application and condoned the two-day delay; the departmental action (rejection and consequent measures) was set aside to effectuate the scheme's objects. Issue 2: Scope of High Court's extraordinary writ jurisdiction to condone delay where scheme/authority has no express condonation power Legal framework: Article 226 confers broad equitable powers on the High Court to do complete justice in extraordinary writ jurisdiction; statutory absence of condonation power for administrative authorities does not preclude judicial intervention to remedy injustice. Precedent Treatment: The Court relied upon higher judicial authority establishing that High Courts may exercise wide remedial powers under Article 226 to prevent injustice even where statutory schemes do not provide parallel powers (including Supreme Court and High Court decisions permitting late compliance subject to conditions in extraordinary circumstances). Interpretation and reasoning: The Court reasoned that denial of relief on technical, inadvertent grounds would render the amnesty scheme illusory and defeat its purpose. Given the admitted bona fides, substantial prior compliance and absence of prejudice to the revenue, exercise of writ jurisdiction to condone delay was appropriate to further the scheme's objectives and conserve public resources that would otherwise be spent in prolonged litigation. Ratio vs. Obiter: Ratio - the High Court can, in exercise of extraordinary writ jurisdiction, condone short, inadvertent delay in payment under an amnesty scheme where there is demonstrable bona fides, substantial compliance, and no prejudice to the revenue; such relief advances the scheme's object. Obiter - comparative references to broader situations (e.g., Covid hardships) exemplify circumstances warranting judicial relief but are not exhaustive prerequisites. Conclusion: The Court exercised Article 226 jurisdiction to condone the two-day delay and to set aside the rejecting order, finding such relief necessary to remedy injustice and to further the statutory objective of the amnesty scheme. Issue 3: Application of precedents and their treatment Legal framework: The object and purpose of amnesty schemes - expeditious disposal of old disputes, revenue generation, reduction of administrative costs - guide judicial assessment of strict compliance where minor lapses are attributable to circumstances beyond the applicant's control. Precedent Treatment: The Court followed and relied upon decisions that (a) emphasized the scheme's object and permitted relief for short inadvertent non-compliance, (b) allowed late deposits subject to conditions where hardship and lack of prejudice were established, and (c) recognized the High Court's power under Article 226 to effect equitable relief despite absence of explicit statutory condonation powers. A decision distinguishing an otherwise cited authority (where factual matrix and payment completeness were unclear) was expressly noted, justifying selection of the precedent permitting relief in short-delay contexts. Interpretation and reasoning: The Court distinguished any authority that did not demonstrate comparable facts (e.g., full payment or pleaded hardship) and preferred precedent which supported granting relief where delay was brief, unintentional and causally linked to external impediments. The Court emphasized consistency with the settled approach that the administration and judiciary should further the primary object of amnesty schemes rather than defeat them by hyper-technical rejections. Ratio vs. Obiter: Ratio - precedents permitting judicial condonation of short delays in amnesty-like schemes form binding guidance for similar factual matrices; authorities that are factually dissimilar are distinguishable. Obiter - detailed policy reflections on scheme-object promotion and administrative expectations are ancillary, supportive reasoning rather than standalone legal rules. Conclusion: Relevant precedents were followed to condone the short delay and to set aside the departmental rejection; in the absence of prejudice and given bona fide attempts to comply, the Court applied those authorities to further the scheme's objectives. Relief and Consequence On the established facts and applicable legal principles, the Court quashed the order rejecting the application under the amnesty scheme, condoned the two-day delay in payment, set aside consequent demand/enforcement steps to the extent challenged, and made the rule absolute without costs.