2023 (11) TMI 900 - HC - Service Tax

Direction to first respondent to consider the payment made by the petitioner dated 1.3.2021 as payment under SVLDRS Scheme - direction to first respondent to issue discharge certificate in form SVLDRS 4 to the petitioner - HELD THAT - Since the Central Government was delegated with power to fix the time limit for availing the scheme and for making the payment, the Central Government came with the Notifications and provided time limit for the same and the said time limit was extended from time to time due to COVID pandemic situation. Even according to the petitioner, the said scheme was extended upto 30.09.2020 for making the payment by virtue of the Notification dated 27.06.2020. The provisions under the Finance Bill, with regard to the fixation of time limit for availing the scheme and with regard to the extension of time for making payment of tax, is directory in nature. If it is mandatory, there will not be any delegation with regard to the Central Government to fix the time limit for availing the scheme and payment of tax. Since there is delegation with regard to the Central Government, it will only be directory in nature and that is the reason why the Central Government depends upon the situation prevailing in the country and extended the time limit from time to time. Further, there is no doubt that if the provisions are mandatory in nature, this Court normally will not interfere and pass orders against the said provisions. As far as if the provisions are directory in nature, certainly the prevailing situation and the inability of the petitioner due to the said pandemic would be the factors that have to be considered by this Court to pass an appropriate order. In the present case, no doubt that the petitioner had paid the amount on 02.03.2021 during the pandemic period. Therefore, under these circumstances, certainly, this Court can interfere and look into the grievances of the petitioner and if this Court is satisfied, this Court will consider the same and pass appropriate orders. This Court is of the view that the application, filed on 13.02.2023 consequent to the payment made by the petitioner, has to be accepted under the scheme by the respondent and in such view of the matter, this Court has no hesitation to direct the respondent to issue Form SVLDRS-4 to discharge the tax liabilities within a period of 30 days from the date of receipt of copy of this order. The respondents are directed to accept the payment of Rs. 14,98,836/- made by the petitioner under SVLDRS-3 on 01.03.2021. The petitioner is directed to pay interest at 15% p.a. on 14,98,836/- from 01.07.2020 till the date of payment, within a period of four weeks from the date of receipt of a copy of this order, failing which, the benefit granted under this order will automatically cease to operate - Petition allowed.

Summary

Issues Involved:
1. Whether the petitioner's payment under the SVLDRS Scheme can be considered valid despite being made beyond the stipulated period.
2. Whether the petitioner is entitled to the issuance of a discharge certificate under the SVLDRS Scheme.

Summary:

Issue 1: Validity of Payment under SVLDRS Scheme

The petitioner sought a Writ of Mandamus to direct the respondent to consider the payment made on 01.03.2021 under the SVLDRS Scheme and issue a discharge certificate. The petitioner had initially paid Rs. 44,29,032/- on 02.05.2019, which was not accepted, leading to a show cause notice demanding Rs. 70,82,343/- in Service Tax. The petitioner filed a declaration under the SVLDRS Scheme and was required to pay Rs. 14,98,835.20 by 14.03.2020. Due to the pandemic, the deadline was extended to 30.06.2020, but the petitioner failed to pay within this period due to financial constraints. The Supreme Court's suo motu order extended the limitation period for all proceedings from 15.02.2020 until further notice. The petitioner requested more time but was directed to pay the entire amount of Rs. 1,08,29,431/-. The petitioner made the payment of Rs. 14,98,836/- on 01.03.2021 and informed the respondent.

The respondent argued that the petitioner failed to make the payment within the stipulated time, thus forfeiting the benefits of the SVLDRS Scheme. The court noted that the scheme's time limits were extended due to the pandemic and that the Supreme Court's order extended limitation periods. The court held that the provisions for fixing time limits under the SVLDRS Scheme are directory, not mandatory, and that the petitioner's payment during the pandemic should be considered valid.

Issue 2: Issuance of Discharge Certificate

The court concluded that the amount paid by the petitioner on 02.03.2021 should be considered under the SVLDRS Scheme. The court directed the respondent to issue Form SVLDRS-4 to discharge the tax liabilities within 30 days. Additionally, the petitioner was ordered to pay interest at 15% per annum on Rs. 14,98,836/- from 01.07.2020 until the payment date, within four weeks, failing which the benefit granted would cease to operate. The writ petition was allowed, and the respondents were directed to accept the payment and issue the discharge certificate.

Conclusion:

The court allowed the writ petition, directing the respondents to accept the payment made by the petitioner under the SVLDRS Scheme and issue the discharge certificate, subject to the payment of interest.