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TMI Blog2023 (1) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... the scheme "Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019" (hereinafter referred to as the "Scheme of 2019"), the original writ petitioner has preferred the present appeal. 2. The facts leading to the present appeal in nutshell are as under: That the appellant - company registered with the Service Tax Department was a company engaged in providing hospitality services. The Service Tax Department conducted investigations as to the evasion of service tax by the appellant and issued show cause notices demanding payment of service tax under various categories such as Accommodation in Hotels, Inn, Guest House, Restaurant Services, Mandap Keeper services etc. 2.1 Proceedings under the Insolvency and Bankruptcy Code (Amendment) Act, 2021 (hereinafter referred to as "IBC") were initiated against the appellant - Company. The NCLT, Delhi vide order dated 11.09.2018 admitted the application filed by the Financial Creditors of the appellant under Section 7 of the IBC. Thus, on and from 11.09.2018 the corporate insolvency resolution process against the appellant commenced and the appellant was subjected to moratorium under Section 14 of the IBC on and from 11.09.2018. The Committee o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 intimated the appellant that the last date for payment under the Scheme was 30.06.2020, which could not be extended. Consequently, the request of the appellant was rejected. Since the appellant could not obtain permission for payment of the dues post the lifting of the moratorium, the appellant approached the High Court by way of Writ Tax No.328 of 2021. By the impugned judgment and order the High Court has dismissed the said writ petition on the grounds that (i) the High Court shall not issue a direction contrary to the Scheme; (ii) the relief sought cannot be granted as the Designated Committee under the Scheme is not existing. 2.3 Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the High Court, the original writ petitioner - appellant has preferred the present appeal. 3. Ms. Charanya Lakshmikumaran, learned counsel appearing on behalf of the appellant has vehemently submitted that in the facts and circumstances of the case the Hon'ble High Court has seriously erred in dismissing the writ petition and not directing the authority to accept the amount due and payable under the Scheme, 2019. 3.1 It is submitted that the Hon'ble High Court has er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time when the Form No.3 was issued and even during the period under the Scheme 2019, the appellant was subjected to the rigor of the provisions of the IBC by virtue of the moratorium period which ended on 24.07.2020 when the NCLT approved the Resolution Plan. It is submitted that in the instant case, the appellant bonafidely could not deposit the settlement due, on or before 30.06.2020 on account of operation of law. It is next submitted that during the moratorium period, no payment could have been made as per the provisions of the IBC. It is contended that if any payment would have been made during the mortarium period the same would have been in breach of the provisions of the IBC. It is submitted that as per the Resolution Plan accepted during the insolvency proceedings, the Resolution Applicant was required to deposit all statutory dues (including service tax dues) within 6 months from the effective date into an escrow account. That as per the Resolution Plan, payment to escrow account shall be treated as effective payment to the relevant Operational Creditors. It is further contended that in this case, effective date is 24.07.2020, the date on which the Resolution Plan wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 2019 and that discharge certificate be issued to the appellant accordingly. 4. While opposing the present appeal, Shri Vikramjit Banerji, learned ASG appearing on behalf of the Union of India has vehemently submitted that in the facts and circumstances of the case no error has been committed by the Hon'ble High Court in dismissing the writ petition and refusing to direct the respondents to accept the payment towards the settlement dues under the Scheme, 2019. 4.1 It is submitted that admittedly the Scheme was valid upto 30.06.2020 and the last date for payment of settlement amount under the Scheme, 2019 was 30.06.2020. That thereafter the Scheme was closed and even the Designated Committees were also dissolved and therefore as rightly observed by the Hon'ble High Court, the Hon'ble High Court has no jurisdiction to extend the Scheme. It is submitted that if the Scheme is extended it would create many complications. 4.2 It is further submitted that in the present case, admittedly, no payment was made of settlement amount under the Scheme prior to 30.06.2020 and therefore, the prayer of the original petitioner to extend the time limit to make the payment of settlement amount und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t - Resolution Professional / the successful Resolution applicant approached the authority requesting them to accept the settlement amount under the Scheme, 2019 as per the Form No.3. Such request has been rejected by the Commissioner on the rejection has been confirmed by the High Court. 7. Therefore, the short question which is posed for consideration before this Court is, whether, when it was impossible for the appellant to deposit the settlement amount in view of the bar and/or the restrictions under the IBC, the appellant can be punished for no fault of the appellant? In a given case can the appellant be made to suffer for no fault of its own, and be rendered remediless and denied the benefit/relief though it was impossible for the appellant to carry out certain acts, namely to deposit the settlement amount during the moratorium. 7.1 As per the settled position of law, no party shall be left remediless and whatever the grievance the parties had raised before the court of law, has to be examined on its own merits [Sunil Vasudeva (supra) (para 31)]. 7.2 As observed and held by this Court in the case of Calcutta Iron Merchants' Association (supra), no law would compel a person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... came seriously ill on 29.06.2020 and there was nobody to look after his affairs and therefore he could not deposit the amount; such inability was beyond his control and thereafter, immediately on getting out of sickness he tried to deposit the amount and/or approached the Court - can the Court close its eyes and say that though there may be valid reasons and/or causes for that person's inability to make the payment, still no relief can be granted to him? There may be extra ordinary cases which are required to be considered on facts of each case. The Courts are meant to do justice and cannot compel a person to do something which was impossible for him to do. 8.2 Now so far as the other ground given by the High Court, that the Designated Committees are not in existence, is concerned, it is required to be noted that the CBCE has issued a circular that in a case where the High Court/courts have passed an order setting aside the rejection of the claim under the Scheme after 30.06.2020, the applications can be processed manually. In many cases the High Courts have remanded the matter to the Designated Committees which consist of the officers of the Department and the applications therea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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