2022 (2) TMI 1078 - HC - Service Tax

Benefit of Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 - very meagre mismatch of the amount paid which is 0.40 paisa more - whether it can be said that the petitioner had not paid the tax amount to the department on or before the last date of such payment under the scheme? - whether it is construed to be payment of lower amount than required? - HELD THAT - Although technically the department may have rejected the payment of taxes by the petitioner on 30.06.2020 but such rejection itself would also have to be considered to be arbitrary from the point of view that the department could either have accepted the excess payment amounting to 1, 25, 629.60 or the excess amount of 40 paisa could have been returned to the petitioner instead of rejecting the entire amount - the subsequent offer of the petitioner to tender the exact amount and rejection of the same by the department on the ground that the payment was made on the last date of payment also cannot be accepted. The subsequent payment of the petitioner cannot be said to be a late offer of payment and it has to be construed to be an act of repayment of the amount which was already paid earlier but was rejected. The interest of justice will be made if the amount required to be paid by the petitioner is paid and the department accepts it to be the payment that was made on or before 30.06.2020. The payment be made within two weeks from today. In the event it is not paid the department will be at liberty to pass any order - petition allowed.

Summary

Issues:
1. Interpretation of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
2. Discrepancy in the payment of service tax under the scheme.
3. Arbitrariness in the rejection of the payment by the GST department.
4. Validity of subsequent offer for exact payment.
5. Mode of payment after closure of SVLDRS portal.

Issue 1 - Interpretation of the SVLDRS Scheme:
The petitioner, an assessee under GST laws, availed the SVLDRS scheme for payment of service tax. The scheme allowed defaulting taxpayers to settle their dues by a specified date, in this case, 30.06.2020. The petitioner remitted an amount slightly higher than the assessed tax amount, leading to rejection of the payment by the department.

Issue 2 - Discrepancy in Payment:
The petitioner paid an amount exceeding the assessed tax by a nominal 40 paisa. The court noted that the payment was made before the deadline and the excess amount could have been accepted or returned, rather than rejecting the entire payment.

Issue 3 - Arbitrariness in Rejection:
The rejection of the payment by the department was deemed arbitrary. The court opined that the department could have accepted the excess payment or returned the surplus amount instead of outright rejection.

Issue 4 - Validity of Subsequent Payment Offer:
The petitioner's subsequent offer to pay the exact amount was contested by the department, citing the payment was made on the last date. The court held that the subsequent payment was not a late offer but a repayment of the initially rejected amount.

Issue 5 - Mode of Payment After Portal Closure:
With the SVLDRS portal closed, the court directed the petitioner to make the payment through a Challan from a Nationalized Bank to the appropriate GST Department account, ensuring compliance with the scheme's requirements.

In conclusion, the court allowed the writ petition, emphasizing that justice would be served if the correct amount was paid within two weeks. Failure to comply would empower the department to take necessary action.