2021 (12) TMI 339 - HC - Service Tax

Seeking direction upon the 1st respondent to accept the payments in terms of Sabka Vikas (Legacy Dispute Resolution Scheme), 2019 - non-compliance with the requirement of payment of the taxes within the time stipulated - HELD THAT - The time limit prescribed under Chapter-V of the Finance Act for completion of certain actions as stipulated under Chapter-V, stood extended till 30th September, 2020, and Section 6 of the Act deals with two situations, namely, period for completion and period of compliance. Therefore, the said provision has to be given a liberal interpretation and if we do so, the time limit for payment of taxes can be construed to be a time limit for completion of particular act, as stipulated under Chapter-V of the Finance Act. In fact, the said Act has also made certain amendments in the Direct Tax Vivad Se Vishwas Act, 2020, in Chapter-IV. Since Chapter-V of the Act, which deals with relaxation of time limit under Indirect Tax Laws, which stipulates four Tax Laws, which includes Finance Act, 1994, we will be well justified in holding that the time limit for completion of the payment of taxes, as quantified in Form-3, also stood extended till 30.09.2020. If that is the date on which the appellants were required to complete the payment, then the appellant's conduct in approaching this Court by filing the writ petitions on 29.09.2020 and 30.09.2020 can very well be reckoned to be a conduct, which will not be hit by delay and laches. The appellant should be permitted to remit the taxes, as quantified in the Form-3 declaration issued to the appellant, subject to of course by also paying interest @ 15% from 01.07.2020 till the date of remittance, which we shall fix as on or before 17.09.2021. If the appellants comply with the said condition, then the appropriate authority under the SVLDR Scheme shall consider the appellant's application and proceed in accordance with the provisions of the said Scheme. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Challenge to order dismissing writ petitions seeking direction on tax dues settlement under SVLDR Scheme.

Analysis:
The appellant, a partnership firm, challenged an order confirming Service Tax demand. The appellant applied under the SVLDR Scheme but failed to remit taxes within the stipulated time due to the pandemic and lockdown. The Writ Court noted the time limit for payment had expired, leading to dismissal of the writ petitions. However, in a similar case, relief was granted due to extended payment deadline till 30.06.2020.

The Parliament enacted the Taxation and Other Laws Act, 2020, extending time limits for various actions under different Acts. Section 6 of the Act extended the time limit for completion or compliance of actions till 30.09.2020. This provision included relaxation of time limits under Indirect Tax Laws, such as the Finance Act, 1994. The Act aimed to extend time limits for compliance or completion of specified acts under the Statute.

The Court interpreted the Act liberally, considering the time limit for payment of taxes under the SVLDR Scheme as a time limit for completion of a particular act under the Finance Act. The Court held that the appellant's conduct in filing writ petitions on 29.09.2020 and 30.09.2020 was not delayed due to the extended deadline till 30.09.2020. Therefore, the appellant was allowed to remit taxes, subject to paying interest @ 15% from 01.07.2020 till 17.09.2021, if they comply with this condition.

Consequently, the Writ Appeals were allowed, the impugned order was set aside, and no costs were awarded. The appropriate authority under the SVLDR Scheme was directed to consider the appellant's application if the conditions were met. The connected Miscellaneous Petitions were closed as a result of the judgment.