2026 (3) TMI 1152 - HC - Service Tax

Remedial scheme protection: genuine electronic payment failure during an extended period warrants relief and quashing of arbitrary rejection.

Benefits under the Sabka Vishwas (Legacy Dispute Resolution) Scheme cannot be withheld on hyper-technical grounds when the applicant is not at fault; ... Entitlement to issuance of Form SVLDRS-4 - claim under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - denied for technical difficulties beyond the assessee's control - payment not made within the stipulated time - arbitrariness - non-application of mind - legitimate expectation - procedural fairness - extension of time due to force majeure. Entitlement to issuance of Form SVLDRS-4 despite payment difficulties caused by technical issues during the COVID-19 period - HELD THAT: - In the decision of Arjun Rampal [2023 (5) TMI 13 - BOMBAY HIGH COURT] following the decision of Shekhar Resorts Limited Vs. Union of India & Ors [2023 (1) TMI 256 - SUPREME COURT] it has been held that while considering the SVS, 2019 scheme the benefit thereof could not be deprived merely on the basis of a technical issue for which the assessee was not at fault. In the facts of the present case, the Petitioner-assessee made the payment of the determined tax in the extended period as the Covid-19 pandemic hit the country, however challan was not getting uploaded due to some technical issue. This to our mind, was a genuine difficulty which the Petitioner was facing and hence the rejection of the Petitioner’s request for issuance of discharge certificate in form SVLDRS-4 by letter/order dated 13th December 2023 by Respondent No. 3 was arbitrary and not warranted. The action of Respondent No. 3 also disregards several decisions of this Court and the Supreme Court, and the other High Courts as enumerated in paragraph 5 above, and hence the aforesaid rejection has been made on a complete non application of mind. In light of the above discussion and in view of the settled position of law, we deem it appropriate to pass the following order which will meet the ends of justice. Final Conclusion: The petition succeeds: the order rejecting issuance of Form SVLDRS-4 is quashed and set aside, the earlier order of attachment is quashed, and the respondents are directed to issue Form SVLDRS-4 to the petitioner within four weeks. Issues: Whether the Respondents were justified in rejecting the Petitioner's claim under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and refusing to issue Form SVLDRS-4 on the ground that payment was not made within the stipulated time when the Petitioner made the payment during the extended period but faced technical difficulties in generation/upload of challan.Analysis: The petition challenges the administrative rejection dated 13.12.2023 and seeks quashing of that rejection and the earlier attachment dated 18.01.2016. The Court examined the object and purpose of the SVS, 2019 as a one-time measure intended for liquidation of legacy disputes and disclosure of unpaid taxes and noted authoritative decisions holding that benefits under the scheme should not be denied on hyper-technical grounds for which the assessee is not at fault. The Petitioner demonstrated payment during the period extended because of the COVID-19 pandemic and showed repeated attempts and communications regarding technical failure to generate/upload the challan; the Department relied on non-payment within the original timeframe. Considering the scheme's remedial object, the Court treated the technical inability to complete electronic payment (including automatic CPIN expiry and returned payment) as a genuine difficulty and found the rejection to be arbitrary and to amount to non-application of mind, contrary to settled precedents permitting relief where procedural formalities break down due to factors beyond the petitioner's control.Conclusion: The letter/order dated 13th December 2023 rejecting issuance of Form SVLDRS-4 is quashed and set aside; the order of attachment dated 18th January 2016 is quashed and set aside; the Respondents are directed to issue Form SVLDRS-4 to the Petitioner within four weeks.Ratio Decidendi: Where a statutory or executive settlement scheme is intended as a one-time remedial measure, benefits under the scheme cannot be denied on hyper-technical grounds for which the applicant is not responsible; genuine technical inability to comply with electronic payment formalities, especially during a period extended for force majeure, warrants relief and quashing of administrative rejection.