2023 (3) TMI 240 - HC - Service Tax

Non-issuance of Discharge Certificate in Form SVLDRS 4 as per Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) as per provision of Section 127(8) of the Finance Act, 2019 - HELD THAT - It is not in dispute that the petitioner as required under the law had made the payment twice. Both the times, it had twice been recredited in his account and therefore, for the third time, it needed to make a payment and by then, the time limit prescribed had already been over. The order in case of M/s Yashi Contructions 022 (3) TMI 110 - SC ORDER , taken note of, where the Apex Court while endorsing the refusal of the relief by the High Court for extension of period to make the deposit under the scheme, held that the settled proposition of law is that the person who wants to avail the benefit of a particular scheme has to abide by the terms and conditions of the scheme. If the time extended is not provided under the scheme, it will then tantamount to modifying the scheme which is the prerogative of the government. Here is not the case where any extension sought for not having been granted where request on the part of the petitioner would also not tantamount to modifying the scheme as he was never at fault. Twice when he made an attempt, he failed on account of technical glitch. Applying the ratio laid down by the Apex Court mutandis mutandis in the case of the present petitioner who was not under the fault when this amount could not get deposited with the bank and was recredited after having once gone to the bank, to deny him the benefit only because there were technical glitches about which it could not have done anything, would amount to leaving the petitioner remediless which is impermissible under the law and this also since has been succinctly addressed by the Apex Court., following the decision in the case of M/s Shekhar Resorts Limited 2023 (1) TMI 256 - SUPREME COURT this petition is being allowed. The payment as per the directions of the committee was needed to be made by 30.6.2020 which instead had been made on 8.7.2020. Not only the Court can be oblivious of the Covid 19 pandemic being at its peak during that period for generating the payment was something where there was no say of the petitioner. Therefore, not only the respondents denial for considering the case but later recovery of the entire amount of Rs 7,68,675/- on 11.7.2022 shall need to be reverted/refunded to the petitioner. Accordingly the petition is allowed.

Summary

Issues Involved:
1. Non-issuance of Form SVLDRS-4 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
2. Recovery proceedings initiated under Section 79(1)(c) of the CGST Act.
3. Refund of the amount paid under coercive action by the respondents.

Detailed Analysis:

1. Non-issuance of Form SVLDRS-4 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019:
The petitioner, engaged in manpower recruitment and maintenance services, challenged the respondent's action of not issuing Form SVLDRS-4 under the SVLDRS scheme as per Section 127(8) of the Finance Act, 2019. The petitioner had filed an application under the scheme and was required to pay Rs 81,050.60 as full and final settlement. Despite making the payment within six days, technical glitches resulted in the amount being re-credited to the petitioner's account. The petitioner made multiple attempts to pay, but the due date elapsed, leading to the non-issuance of the discharge certificate. The court noted that the petitioner made bona fide attempts to comply with the scheme's requirements and cited precedents where technical issues during the Covid-19 pandemic were considered valid reasons for delays.

2. Recovery proceedings initiated under Section 79(1)(c) of the CGST Act:
The respondent initiated recovery proceedings under Section 79(1)(c) of the CGST Act, directing the petitioner to pay liabilities. The petitioner argued that the payment was made under the SVLDRS scheme and that the matter should be considered resolved. The court observed that the petitioner had made the payment as required but faced technical issues. The court emphasized that denying the petitioner the benefit of the scheme due to technical glitches would be unjust and would leave the petitioner remediless, which is impermissible under the law.

3. Refund of the amount paid under coercive action by the respondents:
The petitioner sought a refund of Rs 7,68,675, which included service tax, interest, and penalty paid due to the respondents' coercive actions. The court referenced the decision in M/s Shekhar Resorts Ltd. Vs Union of India, where the Apex Court held that no party should be left remediless and that legal impediments preventing timely payments should be considered. The court applied this rationale to the petitioner's case, noting that the technical glitches were beyond the petitioner's control. Consequently, the court directed the respondents to refund the amount with interest and issue the discharge certificate.

Conclusion:
The court allowed the petition, directing the respondent to consider the payment made by the petitioner towards the SVLDRS settlement dues and issue the discharge certificate. Additionally, the respondents were ordered to refund Rs 7,68,675 with interest within eight weeks. The judgment emphasized the importance of considering bona fide attempts to comply with legal requirements, especially during the Covid-19 pandemic, and ensuring that parties are not left without remedies due to technical issues.