Sai Balaji Sponge Iron INDIA PVT. LTD. vs. Union Of INDIA
Held
The Court held that the respondents' refusal to adjust the insurance compensation against the scheme dues was hyper-technical and arbitrary, contrary to the scheme's intent. The Court directed the adjustment of insurance proceeds to clear the scheme dues and then the GST dues.
Facts
The petitioner's goods were attached for non-payment of central excise dues. The petitioner sought to settle these dues under the Sabka Vishwas (Legacy) Dispute Resolution Scheme, 2019. An insurance claim for damaged goods was approved, and the petitioner requested the insurance proceeds be used to clear the scheme dues and any remaining balance be transferred to the GST department.
Key Issues
Whether insurance compensation proceeds can be adjusted against dues under the Sabka Vishwas (Legacy) Dispute Resolution Scheme, and if the technicalities of payment should override the scheme's intent.
Sections Cited
Sabka Vishwas (Legacy) Dispute Resolution Scheme, 2019
AI-generated summary — verify with the full judgment below
HON’BLE SRI JUSTICE C. PRAVEEN KUMAR AND HON’BLE SRI JUSTICE R. RAGHUNANDAN RAO
W.P.No.21341 of 2019
ORDER: (Per Hon’ble Sri Justice R. Raghunandan Rao)
The petitioner is a manufacturer of sponge iron. In the course of its operations, the Central Excise authorities had attached the goods of the petitioner on account of non-payment of central excise. Initially, 1636 mts. of sponge iron, valued at Rs.2,37,18,155/-, was attached on 29.09.2016. Subsequently, 4300 mts. of sponge iron was attached on 18.01.2019 to recover an amount of Rs.8,38,09,828/-. At that stage, the Government of India had introduced Sabka Vishwas (Legacy) Dispute Resolution Scheme, 2019 (hereinafter referred to as the scheme) for the purpose of closing past disputes and to ensure early recovery of unpaid taxes. As the petitioner was eligible to apply under the said scheme, an application was made for settlement of all liabilities under the Central Excise Act. The authorities had thereupon, crystallised the amount due under the scheme as Rs.2,56,91,472/-. This amount had to be paid by 30.06.2020. It appears that upon an application made by the tax payer, this time limit could be extended
The judgment continues below.
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