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2024 (8) TMI 155 - HC - Service TaxShort payment of service tax - Denial of benefit of Sabka Vishwas (Legal Dispute Resolution) Scheme 2019 (SVLDRS) - denial on the ground that tax dues as per the said scheme was paid on 1st July 2020 which is after due date of 30th June 2020 - whether payment made on 1st July 2020 can be said to have been made as per SVLDR Scheme? HELD THAT - The objective of SVLDR Scheme has been culled out by the Co-ordinate Bench of this Court in the case of Capgemini Technology Services India Limited Vs. Union of India 2020 (10) TMI 3 - BOMBAY HIGH COURT wherein the High Court has observed ' From a reading of the statement of object and reasons, it is quite evident that the scheme conceived as a one time measure, has the twin objectives of liquidation of past disputes pertaining to central excise and service tax on the one hand and disclosure of unpaid taxes on the other hand. Both are equally important amicable resolution of tax disputes and interest of revenue. As an incentive, those making the declaration and paying the declared tax verified as determined in terms of the scheme would be entitled to certain benefits in the form waiver of interest, fine, penalty and immunity from prosecution.' The payment whether made under a challan generated under service tax or under SVLDR Scheme would not make any difference, inasmuch as, admittedly in both the cases, it is only the correct challan which has not been filled, but the payment has admittedly been received in the coffers of Respondents , i.e., Union of India. It is settled position that procedural irregularities cannot come in the way of substantial justice - Petitioner could not be said to have had any mala fide intention in delaying the payment by one day, since the challan generated stated the expiry date as 1st July 2020. Petitioner was, therefore, under a bona fide belief that he could make the payment on 1st July 2020 which admittedly he has paid on said date. On the facts of the present case denying the benefit of SVLDR Scheme would not only be contrary to the objective of the Scheme, but also would be injustice to Petitioner declarant who otherwise is eligible. Petitioner is justified in placing reliance on decisions of Coordinate Bench of this Court in the case of Innovative Antares 2023 (2) TMI 12 - BOMBAY HIGH COURT , Arjun Rampal 2023 (5) TMI 13 - BOMBAY HIGH COURT and Sitec Labs Ltd. 2024 (6) TMI 585 - BOMBAY HIGH COURT , wherein on similar facts and after considering the decision of Supreme Court in M/s. Yashi Constructions 2022 (3) TMI 110 - SC ORDER directed revenue to accept SVLDRS declaration when payment could not be made due to technical glitch before 30 June 2020 in contrast to decision of Single Judge of Madhya Pradesh High Court in M/s. Dinesh Kumar Yadav 2022 (11) TMI 343 - MADHYA PRADESH HIGH COURT . Communications dated 6th September 2021 and 27th September 2021 are quashed and set aside - Respondents are directed to issue Form SVLDRS 4 to Petitioner within a period of four weeks from the date of uploading of the present order. Petition disposed off.
Issues:
Challenge to communication directing payment of service tax liability under SVLDR Scheme 2019. Analysis: The petitioner challenged a communication from Respondent No. 5 directing payment of service tax liability under the Sabka Vishwas (Legal Dispute Resolution) Scheme 2019 (SVLDRS). The petitioner, engaged in facade solutions business, faced an enquiry alleging short payment of service tax. The petitioner filed for SVLDRS benefit on 31st December 2019, declaring tax dues of Rs. 32,05,890. Despite generating a challan for payment by 31st March 2020, the petitioner paid on 1st July 2020 due to a technical glitch and pandemic-related extension. Respondents refused the final certificate under SVLDRS, demanding full payment. The petitioner argued technical difficulties caused the delay, citing precedents supporting acceptance of SVLDRS declarations. The respondents opposed the petition, highlighting the one-day delay in payment and citing relevant case laws. They contended that the payment was not under SVLDRS but a service tax challan, urging dismissal. The primary issue was whether the payment made on 1st July 2020 qualified under SVLDRS. The court referenced the SVLDRS objective for past dispute resolution and unpaid tax disclosure, emphasizing benefits for declarants. It noted that procedural irregularities should not impede substantial justice. Considering the technical glitch and absence of mala fide intent, the court found denying SVLDRS benefits unjust. It distinguished the present case from precedents involving financial constraints, emphasizing the payment made and the technical issue faced. The court held that denying SVLDRS benefits would contradict the scheme's objective and cause injustice to the eligible petitioner. It rejected the respondents' reliance on certain case laws, emphasizing the technical glitch's impact on payment timing. Relying on prior decisions of the Co-ordinate Bench, the court directed the respondents to issue Form SVLDRS 4 to the petitioner within four weeks, quashing the challenged communications. The judgment favored the petitioner's position, considering the technical challenges faced and the overall objective of the SVLDRS.
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