M/S L G Chaudhary vs Union Of India
2022 Latest Caselaw 9130 Guj

    C/SCA/12366/2021                           JUDGMENT DATED: 14/10/2022




            IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

              R/SPECIAL CIVIL APPLICATION NO. 12366 of 2021


FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE N.V.ANJARIA
and
HONOURABLE MR. JUSTICE BHARGAV D. KARIA
==========================================================

1    Whether Reporters of Local Papers may be allowed
     to see the judgment ?

2    To be referred to the Reporter or not ?

3    Whether their Lordships wish to see the fair copy
     of the judgment ?

4    Whether this case involves a substantial question
     of law as to the interpretation of the Constitution
     of India or any order made thereunder ?

==========================================================
                           M/S L G CHAUDHARY
                                  Versus
                             UNION OF INDIA
==========================================================
Appearance:
MR ANAND NAINAWATI(5970) for the Petitioner(s) No. 1
NOTICE SERVED BY DS for the Respondent(s) No. 1,4,5
PRIYANK P LODHA(7852) for the Respondent(s) No. 2,3
==========================================================

    CORAM:HONOURABLE MR. JUSTICE N.V.ANJARIA
          and
          HONOURABLE MR. JUSTICE BHARGAV D. KARIA

                         Date : 14/10/2022
                         ORAL JUDGMENT

(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA)

1. Heard learned advocate Mr. Anand Nainavati

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

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.

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

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

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.

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

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/-.

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

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

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

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.

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

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.

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

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.

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

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

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

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





 C/SCA/12366/2021                                        JUDGMENT DATED: 14/10/2022




    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

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

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

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

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:

 M/s. Jai Guru Cables vs. The Principal Chief Commissioner of GST and Central Excise, The Additional Commissioner/Member of Designated Committee, The Deputy Commissioner/Member of Designated Committee, the Assistant Commissioner, The Superintendent reported in 2022(4) TMI 935:

"15.The scheme is intended to allow chronic defaulters to pay the amount and buy peace. The delay in payment on account of technical glitches cannot come in the way of the petitioner to settle the dispute. I am therefore inclined to allow this writ petition. For the same reason I am not able to accede to the views of this Court in W.P.No.5409 of 2021 (Convenant Insurance Surveyors and Loss Assessors Private Limited, Chennai Vs. The Designated Committee, Chennai and another) dated 30.11.2021. Under these circumstances, I am of the view that there is no justification in not accepting the declaration of the petitioner under the

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

scheme or in not accepting the payment by the petitioner belatedly. I therefore direct the respondents to accept the payment from the petitioner, if the amount has not been paid or collected from the petitioner already, within a period of 30 days from the date of receipt of a copy of this order and bring a closure in true spirit of the Sabka Vishwas Scheme.

 Agroha Electronics Vs. Union of India, New Delhi, Additional Commissioner, Central Goods and Service Tax, Rajasthan reported in 2021(3) TMI 1319

After hearing learned counsel for the parties and perusing the material available on record, this Court deems it fit that in the given facts and circumstances that the petitioner is a bona fide businessman and is prepared to pay the amount in question in accordance with the scheme along with interest for the period which he has defaulted in scheme and looking into the extreme pandemic conditions of COVID and the death of petitioner's father, this is a fit case for invocation of the powers under Article 226 of the Constitution of India.

In view of the above, the present writ petition is allowed and the respondents are directed to accept the amount as specified in SLVDRS-3 Form No.L280120SV301549 dated 28.01.2020 and give the petitioner benefit of Sabka Vishwas Scheme. The amount

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

stipulated to be paid on or before 30.06.2020 shall be accompanied by interest at the rate of 9% per annum till the date the amount is paid. The compliance of this order shall be made by the petitioner within a period of three weeks from today.

 Thought Blurb vs. Union of India and ors reported in 2020 (10) TMI 1135:

"52. We have one more reason to take such a view. As has rightly been declared by the Hon'ble Finance Minister and what is clearly deducible from the statement of object and reasons, the scheme is a one time measure for liquidation of past disputes of central excise and service tax as well as to ensure disclosure of unpaid taxes by a person eligible to make a declaration. The basic thrust of the scheme is to unload the baggage of pending litigations centering around service tax and excise duty. Therefore the focus is to unload this baggage of pre-GST regime and allow business to move ahead. We are thus in complete agreement with the views expressed by the Delhi High Court in Vaishali Sharma Vs. Union of India, MANU/DE/1529/2020 that a liberal interpretation has to be given to the scheme as its intent is to unload the baggage relating to legacy disputes under central excise and service tax and to allow the business to make a fresh beginning."

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

 Vaishali Sharma vs. Union of India and ors reported in 2020 (8) TMI 81

"9. In the opinion of this Court, a liberal interpretation has to be given to the Scheme as its intent is to unload the baggage relating to legacy disputes under the Central Excise and Service Tax and to allow the businesses to make a fresh beginning."

6.4 Learned advocate Mr. Nainavati also

submitted that the petitioner is ready and

willing to pay the interest @ 9% per annum on

the outstanding dues of Rs. 38,64,256/- from

30.06.2020 till the date of actual payment to

compensate the loss to the revenue.

7. On the other hand, learned advocate Mr.

Priyank Lodha for the respondent-authorities

submitted that the petitioner has wrongly

stated that the petitioner tried to make the

payment on 30.06.2020 which was returned due

to technical glitch. It was further submitted

that the payment gateway stood closed for the

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

Scheme after 30.06.2020 and there was no

technical glitch as alleged by the

petitioner.

7.1 Learned advocate Mr. Lodha submitted

that the petitioner was aware to make payment

as per the SVLDRS-3 since 16.03.2020 and

there is no reason shown by the petitioner to

wait till the last date of making payment on

30.06.2020.

7.2 It was further pointed out that as per

the tax payers manual for SVLDRS, placed on

the website of the Board explains the manner

of generation of challan and payment methods

with screenshots. Chapter VII of the manual

explains the procedure for challan generation

and Chapter VIII for the said manual explains

the payment methods which clearly mentioned

that net banking facility is not available

for making payment of the SVLDRS Scheme,

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

2019. It was submitted that the petitioner

was required to generate the challan and

thereafter make the payment as per the

procedure explained in the tax payer manual

for the Scheme, but the petitioner did not

follow such procedure.

7.3 It was submitted that the respondent-

authorities have no power to extend the time

limit for allowing the payment after

30.06.2020 and accordingly, the petitioner

was not permitted to make the payment as

determined by the respondent No.2 in Form

SVLDRS-3.

7.4 It was pointed out that now the order

in-original has been passed and the demand

and the petitioner has failed make the

outstanding dues under the guise of availing

the benefit under the Scheme.

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

7.5 It was submitted that the petitioner is

not entitled to the benefit of the order

dated 08.03.2021 passed by the Hon'ble

Supreme Court in suo motu Writ Petition

extending the time limit, more particularly,

when the time limit, as per the Scheme is

already over on 30.06.2021. Learned advocate

Mr. Lodha invited attention of the Court to

the order dated 18.02.2022 of the Hon'ble

Apex Court in case of Yashi Constructions

vs. Union of India wherein the Apex Court has

held that the High Court has rightly refused

to grant relief to the petitioner for

extension of the period to make the deposit

under the Scheme as it is settled position of

law that a person who wants to avail the

benefit of a particular Scheme has to abide

by the terms and conditions of the Scheme

scrupulously. The Apex Court has further held

that if the time is extended not provided

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

under the Scheme, it will tantamount to

modifying the Scheme which is a prerogative

of the Government. The Apex Court has

therefore dismissed the SLP (C) No. 2070 of

2022 filed by the petitioner. It was

therefore submitted that once the extended

time period for making payment was over on

30.06.2020, the petitioner cannot be

permitted to deposit the amount under the

Scheme because it would amount to modify the

Scheme.

8. Having considered the submissions made by

learned advocate for the respective parties,

it is not in dispute that the petitioner was

required to make the payment of Rs.

38,64,256/- as determined in Form SVLDRS-3

and the petitioner tried to make the payment

through NEFT on 30.06.2020, however, the same

was not accepted by the receiving bank and

the payment was returned to the petitioner

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

which is apparent from the bank statement

produced on record.

9. 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.

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

10.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.

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

11.The contention raised on behalf of the

respondents relying upon the decision of the

Apex Court in case of Yashi Constructions

(supra) would not be applicable in the facts

of the case as the petitioner made a bona

fide attempt to make the payment within the

stipulated time, however, due to technical

issues the same was not credited in the

account of the respondent and therefore the

petitioner cannot be denied the benefit under

the Scheme.

12.In view of the above, this petition is

allowed and the respondent authorities are

directed to accept the payment of Rs.

38,64,256/- as specified in SVLDRS-3 dated

16.03.2020 along with interest

@ 9% per annum from 30.06.2020 till the date

of payment and grant the benefit of the

Scheme to the petitioner. The petitioner

C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022

shall deposit the said amount with interest

on or before 15.11.2022. As a consequence,

the impugned order in-original dated

04.01.2021 passed by respondent No.3 is

quashed and set aside so as to grant benefit

of the Scheme to the petitioner. Rule is made

absolute to the aforesaid extent.

(N.V.ANJARIA, J)

(BHARGAV D. KARIA, J) JYOTI V. JANI