Court Affirms MSME Benefits for Reclassified Enterprises Under Vivad Se Vishwas Scheme Despite Status Change.

The High Court held that even though the petitioner, initially registered as a "Medium" enterprise under the MSME Act, was reclassified as "not an MSME" with effect from 9th May 2023, it was entitled to avail the benefit of the "Vivad Se Vishwas I-Relief for MSMEs Scheme" (VSV Scheme), a non-tax benefit. Clause 8(5), as substituted, creates a legal fiction treating an enterprise as Micro, Small or Medium for three years from an upward reclassification, for availing non-tax benefits. Therefore, the petitioner, though reclassified as "not an MSME," could claim the VSV Scheme benefit as a Medium enterprise for three years from 9th May 2023. The emails denying the petitioner's eligibility for the VSV Scheme were held incorrect, and the writ petition was allowed. .....

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