L G Chaudhary Vs Union of India (Gujarat High Court)
Gujarat High Court held that bona fide attempts were made by the petitioner to make the payment under Sabka Vishwas [Legacy Dispute Resolution] Scheme. However, due to technical problems the payment was not done on time. Thus, the substantive benefit of the Scheme cannot be denied to the on the ground of procedural technicalities.
Facts-
During the pendency of the proceedings pursuant to the show-cause notice, Finance Act (No.2), 2019 was enacted containing the Scheme for resolution of the pending disputes with the Central Excise Department. The Scheme provided a one-time window w.e.f. 01.09.2019 to eligible persons to declare their tax dues and pay the same as per the provisions of Chapter-V of the Finance Act (No.2),2019.
The petitioner filed declaration in Form SVLDRS-1 on 25.12.2019 under section 125 of the Finance Act vide online application under the category of Litigation-SCN involving pending duty. The petitioner in the said declaration self-assessed its liability at Rs. 38,64,255.50/- and indicated a pre-deposit of Rs. 9,65,658/-.
Respondent No.2 issued Form SVLDRS-3 on 16.03.2020 under section 127 of the Scheme read with Rule 6 of the Sabka Vishwas [Legacy Dispute Resolution] Scheme Rules, 2019 to the petitioner with an estimated amount of Rs. 38,64,255.50/- as payable.
According to section 127(5) of the Scheme read with Rule 7 of the Rules, the petitioner ought to have paid the amount determined as per Form SVLDRS-3 within thirty days i.e. on or before 16.04.2020, however, due to onset of Covid-19 Pandemic and lock-down starting from March 25,2020 the petitioner could not deposit the amount.
Thereafter, the petitioner tried to make the payment through NEFT determined in Form SVLDRS-3 on 30.06.2020, however, due to some technical glitch from the end of the receiving bank, the payment was returned to the petitioner. The petitioner again attempted to make payment on 02.07.2020 and 03.07.2020, however, it could not be completed due to technical issues.
Meanwhile, Respondent No. 3 called upon the petitioner in respect of show cause notice dated 03.01.2017. The same was adjudicated by Respondent No. 3 raising demand of Rs. 1,87,36,448/- under proviso to section 73(1) along with interest and penalty u/s 75, 77(1) and 78 of the Finance Act, 1994.
The petitioner being aggrieved by not permitting it to make the payment as per Form SVLDRS-3 has preferred this petition.
Conclusion-
It also appears from the record that the petitioner could not generate the challan successfully for making the payment and after the advice of its Chartered Accountant, tried making payment through NEFT/RTGS out of abundance caution and to demonstrate the bona fide of the petitioner to make the payment as determined under the Scheme by respondent No.2 Designated Committee. In view of the various decisions cited by the petitioner as reproduced here-in-above, the bona fide attempt made by the petitioner to make the payment cannot be doubted and therefore, the substantive benefit of the Scheme cannot be denied to the petitioner on the ground of procedural technicalities more particularly, in time of Covid-19 Pandemic.
The basic object of the Scheme is to reduce litigation by allowing the eligible assessee to make the payment of the outstanding dues after availing the relief under the Scheme. As per the provisions of the Scheme, respondent No.2 has issued a statement as provided under section 127 of Chapter-V of the Finance Act (No.02) 2019 determining the amount payable by the petitioner under the Scheme. Therefore, in the given facts and circumstances, the petitioner made bona fide attempt to make the payment as determined under the Scheme and is also prepared to pay the amount in question in accordance with the Scheme along with interest for the period for which the petitioner was not permitted to make payment by respondent authorities considering extreme Pandemic condition of Covid-19, we are of the opinion that this is a fit case for invocation of the powers under Article 226 of the Constitution of India.
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. Heard learned advocate Mr. Anand Nainavati for the petitioner and learned advocate Mr. Priyank Lodha for the respondent Nos. 2 and 3.
2. Rule returnable forthwith. Learned advocate Mr. Priyank Lodha waives service of notice of rule on behalf of the respondent-authority.
3. This petition pertains to non-grant of option to pay the amount determined by respondent No.2-Designated Committee formed under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 [for short ‘the Scheme’] through online facility.
4. The petitioner has further prayed to quash and set aside the order in-original dated 04.01.2021 passed by the respondent No.3-Joint Commissioner, Central GST and Central Excise and letter dated 23.02.2021 issued by respondent No.4, Superintendent, Central GST and Central Excise.
5. Brief facts of the case are as under:
5.1 The petitioner is a partnership firm engaged in Government road construction work and also registered with Service Tax Department under the category of Industrial and Commercial Construction and Transportation of Goods by road.
5.2 The petitioner was subjected to investigation by the respondent Nos. 3 and 4 in respect of the transactions carried out by it from the period 2011-12 to 2014-15 for alleged evasion of service tax and violation of various provisions of Finance Act, 1994 and the Rules made there under.
5.3 A show-cause notice dated 03.01.2017 was issued by the respondent Nos. 3 and 4.
5.4 During the pendency of the proceedings pursuant to the show-cause notice, Finance Act (No.2), 2019 was enacted containing the Scheme for resolution of the pending disputes with the Central Excise Department. The Scheme provided a one-time window w.e.f. 01.09.2019 to eligible persons to declare their tax dues and pay the same as per the provisions of Chapter-V of the Finance Act (No.2),2019.
5.5 The petitioner filed declaration in Form SVLDRS-1 on 25.12.2019 under section 125 of the Finance Act vide online application under the category of Litigation-SCN involving pending duty. The petitioner in the said declaration self-assessed its liability at Rs. 38,64,255.50/- and indicated a pre-deposit of Rs. 9,65,658/-.
5.6 Respondent No.2-the Designated Committee under the Scheme issued Form SVLDRS-2 on 21.02.2020 in terms of section 127 of the Scheme seeking clarifications. The petitioner thereafter filed Form SVLDRS-2A and appeared in-person before respondent No.2 on 28.02.2020 explaining working of pre-deposit made by the petitioner.
5.7 Respondent No.2 issued Form SVLDRS-3 on 16.03.2020 under section 127 of the Scheme read with Rule 6 of the Sabka Vishwas [Legacy Dispute Resolution] Scheme Rules, 2019 (briefly “Rules”) to the petitioner with an estimated amount of Rs. 38,64,255.50/- as payable.
5.8 According to section 127(5) of the Scheme read with Rule 7 of the Rules, the petitioner ought to have paid the amount determined as per Form SVLDRS-3 within thirty days i.e. on or before 16.04.2020, however, due to onset of Covid-19 Pandemic and lock-down starting from March 25,2020 the petitioner could not deposit the amount.
5.9 Respondent No.5-Central Board of Indirect Tax & Customs , Department of Revenue [For short ‘the Board’] announced the relief amid pandemic and nationwide lockdown and extended statutory dates for compliance and payments to 30.06.2020 for payment of dues under the Scheme as per the Taxation and other Laws (Relaxation of Certain Provisions) Ordinance,2020 dated 31.03.2020.
5.10 The Board thereafter on 29.05.2020 amended the earlier circular No. 1071/4/2019-CX.8 dated 27.08.2019 wherein various time limits were prescribed and time limit for electronic payment of tax dues determined in Form SVLDRS was also extended upto 30.06.2020.
5.11 The petitioner tried to make the payment through NEFT determined in Form SVLDRS-3 on 30.06.2020, however, due to some technical glitch from the end of the receiving bank, the payment was returned to the petitioner. The petitioner again attempted to make payment on 02.07.2020 and 03.07.2020, however, it could not be completed due to technical issues.
5.12 The petitioner, thereafter, by letter dated 09.11.2020 informed the respondents about the fact that the petitioner tried to make payment at various instances, but the same could not be completed due to technical issues and requested the respondents-authority to allow the petitioner to make the payment through a demand draft so as to conclude the matter.
5.13 Respondent No.3 meanwhile called upon the petitioner by letter dated 16.12.2020 in respect of show-cause notice dated 03.01.2017. The petitioner intimated the respondent No.3 vide letter dated 29.12.2020 that the petitioner has already filed a declaration under the Scheme and the attempt of the petitioner to make the payment was not successful. The petitioner again requested respondent No.3 to allow it to make payment of the dues determined in Form SVLDRS-3 through demand draft.
5.14 However, respondent No.3 by the impugned order dated 04.01.2021 adjudicated show-cause notice dated 03.01.2017 raising total demand of Rs. 1,87,36,448/- under proviso to section 73(1) along with interest and penalty under sections 75, 77(1) and 78 of the Finance Act, 1994.
5.15 Respondent No.4 on 23.02.2021 issued notice for recovery of the dues as per the order dated 04.01.2021. The petitioner, thereafter, by letter dated 01.04.2021 informed the respondent No.2 to allow the petitioner to make payment in respect of SVLDRS-3 considering the instructions dated 17.03.2021 issued by the Board whereby the Chief Commissioners of CGST were directed to forward all reference of grant of manual process of declaration to the Board and the same can be processed manually by the concerned designated Committee subject to certain conditions.
5.16 The petitioner again by letter dated 02.04.2021 informed respondent No.5-Board about the filing of declaration by the petitioner under the Scheme and issuance of Form SVLDRS-3 determining the amount of Rs. 38,64,256/- which could not be paid by the petitioner due to technical issues. The petitioner also contended that the Hon’ble Supreme Court by order dated 08.03.2021 passed in suo motu Writ Petition (Civil) No. 3 of 2020 has directed that while computing the period of limitation, the period from 15.03.2020 to 14.03.2021 to be excluded. The petitioner being aggrieved by not permitting it to make the payment as per Form SVLDRS-3 has preferred this petition.
6. Learned advocate Mr. Nainavati for the petitioner submitted that it is apparent from the bank statement of the petitioner that the petitioner tried to make the payment of Rs. 38,64,256/- on 30.06.2020 but was returned in the bank account of the petitioner with Yes Bank on 03.07.2020.
6.1 It was submitted that the petitioner has already made pre-deposit of Rs. 9,65,656/- at the time of making the application in Form SVLDRS-1 and the petitioner was required to pay Rs. 38,64,256/- as per from SVLDRS-3 but the same could not be paid due to technical glitch from the receiving bank and the payment was returned and thereafter, the respondent authorities did not permit the petitioner for payment of the amount determined by the respondent No.2-Designated Committee for resolution of the dispute.
6.2 It was submitted that as per the provision of the Scheme, the petitioner has preferred the application being eligible to avail the benefit under the Scheme in Form SVLDRS-1 and after verification of the declaration by the respondent No.2-Designated Committee under section 126 of the Finance Act, statement was issued by the Designated Committee under section 127 indicating the amount payable by the petitioner. Learned advocate Mr. Nainavati invited the attention of the Court to the provisions of section 127(5) which stipulates that the payment has to be made electronically through internet banking with regard to the amount payable as indicated in the statement issued by the Designated Committee within thirty days from the date of issue of such statement. It was pointed out that the petitioner could not make the payment due to Covid-19 Pandemic situation prevailing in the month of March 2020 and pursuant to the date extended by the Board upto 30.06.2020, the petitioner has already tried to make payment on 30.06.2020 which was returned by the receiving bank. It was therefore, submitted that the bank account of the petitioner has already been debited but the same was not accepted by the receiving bank and was returned. It was therefore, submitted that there is no failure on the part of the petitioner to make the payment within the time.
6.3 In support of his submissions learned advocate Mr. Nainavati referred to and relied upon the following decisions:
