Bentex Control And Switchgear PVT LTD vs. Union Of INDIA & Ors.

Held

The Court held that the writ petition was liable to be dismissed on two primary grounds: delay and laches, and the petitioner's failure to comply with the SVLDR Scheme's procedural requirements. Regarding the first issue, the Court found that the petitioner had failed to provide a cogent explanation for the 2.5-year delay in approaching the Court after the rejection of their application on 25.12.2019. The Court noted that the petitioner's reliance on Supreme Court orders regarding the exclusion of the COVID-19 period was misplaced, as the courts had been functioning. The Court also emphasized that representations alone were not an adequate explanation for delay. On the second issue, the Court observed that the petitioner had not complied with the instructions provided on the acknowledgement receipt (Annexure P-2), which required submitting an undertaking as per CBIC Circular No. 1074/07/2019-CX. The Court found that the petitioner had deliberately concealed these facts in their pleadings and had not followed the prescribed procedure under the SVLDR Scheme. The Court distinguished the cases cited by the petitioner, noting that they were decided based on different facts and circumstances, and the petitioners in those cases had approached the Court promptly. The Court concluded that the petitioner had not approached the Court with clean hands and had failed to demonstrate any cause for granting relief under the SVLDR Scheme, which had long since closed. Therefore, the writ petition was dismissed.

Facts

The petitioner, Bentex Control and Switchgear Pvt Ltd, a manufacturer, had goods seized during a search for being unaccounted for. They paid duty, interest, and penalty. Subsequently, a show cause notice was issued, leading to an Order-in-Original imposing a redemption fine of Rs. 18,00,000/- on finished goods and Rs. 72,000/- on raw materials. This was upheld by the Commissioner (Appeals) but the CESTAT, by order dated 29.12.2017, confirmed the fine for finished goods and set aside the fine for raw materials. The petitioner applied under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme) on 10.12.2019. Their application was rejected via an email dated 25.12.2019. The petitioner filed the present writ petition on 31.05.2022, seeking adjudication under the SVLDR Scheme.

Key Issues

1. Whether the petitioner's application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme) was validly rejected, considering the remarks on the acknowledgement receipt and the subsequent conduct of the petitioner? (Mixed question of law and fact, turning on the interpretation of the SVLDR Scheme and the petitioner's compliance). 2. Whether the writ petition is barred by delay and laches, given the significant time lapse between the rejection of the application and the filing of the petition? (Question of law, turning on principles of delay and laches in writ jurisdiction). Petitioner's arguments: The petitioner sought adjudication under the SVLDR Scheme. They relied on various judgments where similar rejections under the SVLDR Scheme were set aside and opportunities for hearing were granted, citing cases like "Chaque Jour HR Services Pvt. Ltd. vs. Union of India" and "Industrial Personnel & Security Services Pvt. Ltd. vs. Commr. of CGST, Delhi South". They also attempted to rely on Supreme Court orders regarding the exclusion of the COVID-19 period from limitation periods. Revenue's arguments: The revenue argued that the petitioner failed to comply with the instructions noted on the acknowledgement receipt (Annexure P-2), specifically the requirement to submit an undertaking in terms of para vii of CBIC Circular No. 1074/07/2019-CX. They also contended that the petitioner was guilty of significant delay and laches in filing the writ petition, having waited over 2.5 years after the rejection of their application. The revenue also pointed out that the SVLDR Scheme had concluded, and no similar scheme was in place.