2022 (1) TMI 1070 - HC - Central Excise

Seeking direction to accept the amount of tax which was returned inadvertently due to mismatch in the amount remitted - Sab Ka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - HELD THAT - It is well known that when an amount to the tune as is in the present case is transferred message is received by bank account holder either on the mobile or through E-mail. The same is the case when the transfer is declined and the amount is re-credited in the bank account. It cannot hence be assumed that the petitioners were not aware of the return of remittance having been made in their account. As per Rule 9 of the Sab Ka Vishwa (Legacy Dispute Resolution) Scheme, 2019 , designated committee on being satisfied of payment of amount in full as determined by it shall issue electronically a discharge certified under sub Section (8) of Section 127 of the Finance Act, 2019 within 30 days of the payment and submission of proof. Had the petitioners remitted the amount of ₹ 10,30,274/- on 30.06.2020, on an after 31.07.2020 they would have certainly made efforts for procuring a discharge certificate as aforesaid. However, there is absolutely no whisper in the entire petition as regards any effort to that effect having been made by the petitioners. As per the petitioners if they had made the payment they would have certainly insisted upon issuance of the certificate. The natural course of conduct for the petitioners upon service of the said notices would have been to take up the matter with the department informing it that they have already paid the amount under the Amnesty scheme hence are now not liable for payment of any amount as demanded. However, the petitioners did not do so and were again on 22.06.2021 served with another demand notice for the aforesaid amount. Yet they did not take up the matter with the department - It is hence apparent that they are no bona fides on part of the petitioners in approaching this Court. Their conduct manifestly shows that they were always aware of the return of the amount which was purportedly remitted by them. The submission of petitioners that the they are still ready and willing to deposit the amount along with interest up to date hence be granted the benefit under the scheme is also liable to be rejected as the same appears to be a mere after thought and an effort by them to wriggle out of the lapses on their part. In any case the Amnesty scheme has already come to an end hence no benefit under the same can be granted to the petitioners. Petition dismissed.

Summary

Issues:
1. Acceptance of tax amount returned due to mismatch.
2. Interpretation of the "Sab Ka Vishwas (Legacy Dispute Resolution) Scheme, 2019".
3. Bona fides of the petitioners in approaching the court.
4. Compliance with the rules and procedures of the Amnesty Scheme.
5. Timeliness of actions taken by the petitioners.

Issue 1: Acceptance of tax amount returned due to mismatch
The petitioners sought direction to the respondents to accept the tax amount of ?10,30,273.60 returned inadvertently due to a mismatch in the remitted amount. The petitioners, a manufacturing company, had been issued a notice for Central Excise Duty recovery. They participated in the Amnesty Scheme, intending to resolve the dispute with substantial relief. Despite remitting ?10,30,274/- against the demand, a mismatch led to the remittance rejection. The petitioners, unaware of the return, discovered it later and approached the respondents for acceptance, but due to the scheme closure, no response was received. The petitioners maintained the balance in their account and expressed willingness to pay the amount.

Issue 2: Interpretation of the "Sab Ka Vishwas (Legacy Dispute Resolution) Scheme, 2019"
The petitioners relied on the Amnesty Scheme, emphasizing their good intentions in rounding off the payment and their readiness to deposit the amount with interest. However, the respondents argued lack of bona fides on the petitioners' part, questioning the absence of supporting documents for the mismatch claim. The court noted the scheme's requirement for a discharge certificate upon payment, which the petitioners did not pursue after the remittance rejection. The lapse of the scheme and the petitioners' inaction upon receiving demand notices indicated a lack of genuine efforts to resolve the matter within the scheme's framework.

Issue 3: Bona fides of the petitioners in approaching the court
The court observed that the petitioners' conduct, including keeping the remitted amount in a fixed deposit and earning interest, indicated awareness of the remittance return. The petitioners' failure to engage with the department after receiving demand notices and the delayed petition filing raised doubts about their intentions. The court concluded that the petitioners' contentions lacked credibility, especially considering their actions post-remittance rejection.

Issue 4: Compliance with the rules and procedures of the Amnesty Scheme
The court highlighted the petitioners' failure to follow the scheme's procedures, such as obtaining a discharge certificate and engaging with the department post-rejection. The lack of efforts to resolve the matter within the scheme's timeline and the subsequent silence on the issue indicated non-compliance with the scheme's requirements, leading to the dismissal of the petition.

Issue 5: Timeliness of actions taken by the petitioners
The court noted the delayed response from the petitioners in addressing the remittance issue, as well as their failure to act promptly upon receiving demand notices. The petitioners' belated attempts to rectify the situation and seek benefits under the scheme were viewed as an afterthought, lacking merit due to the scheme's expiration. The court upheld the respondents' arguments and dismissed the petition, citing the petitioners' failure to demonstrate genuine efforts to resolve the dispute within the scheme's framework.

In conclusion, the court found the petition devoid of merit, highlighting the petitioners' lack of bona fides, non-compliance with the scheme's procedures, and delayed actions in addressing the remittance issue. The court dismissed the petition, emphasizing the petitioners' failure to demonstrate genuine efforts to resolve the dispute within the framework of the Amnesty Scheme.