M/S. Ohm Srinivasa Paper Boards PVT.LTD. vs. The Assistant Commissioner Of Central GST And Central Excise

Facts

The petitioner, M/s. Ohm Srinivasa Paper Boards Pvt. Ltd., filed a writ petition challenging an order dated August 26, 2021, issued by the Assistant Commissioner of Central GST and Central Excise. This order created a demand under Form GST DRC-07A for arrears of tax on self-assessment under the Central Excise Act, 1944, for the period between February 2015 and June 2017. The total demand amounted to Rs. 1,46,79,069, comprising tax, interest, and penalty. The petitioner had previously attempted to resolve this dispute under the Sabka Vishwas (Legacy Disputes Resolution) Scheme, 2019, but failed to pay the admitted liability. The petitioner has since paid Rs. 25,00,000, leaving a balance of Rs. 1,21,79,069.

Held

The Court acknowledged that the petitioner had failed to discharge the admitted liability under the Sabka Vishwas (Legacy Disputes Resolution) Scheme, 2019, and therefore, could not avail the benefits of the scheme. The Court also noted that the petitioner had accumulated losses and was unable to discharge the tax liability under the old regime. Considering these facts and the fact that there was no dispute regarding the amount to be recovered, the Court exercised its discretion in favour of the petitioner. The Court directed the petitioner to pay the balance outstanding amount of Rs. 1,21,79,069 in 12 equated monthly installments, commencing from August 1, 2024, and concluding on July 1, 2025. The Court also stipulated that if the petitioner failed to adhere to this payment schedule, the respondent would be at liberty to proceed against the petitioner in accordance with law, including attachment and sale of properties. The issue of applying the Sabka Vishwas Scheme with interest was implicitly rejected by the Court's direction for installment payments.

Key Issues

1. Whether the petitioner is entitled to settle the excise dues under the Sabka Vishwas (Legacy Disputes Resolution) Scheme, 2019, with reasonable interest for the delayed period, despite failing to pay the admitted liability within the stipulated time under the scheme? (Question of law turning on the interpretation of the Sabka Vishwas (Legacy Disputes Resolution) Scheme, 2019). 2. If the Scheme cannot be applied, whether the respondent should be directed to provide reasonable time for the petitioner to pay the outstanding amounts in equated monthly installments? (Question of mixed law and fact turning on the financial capacity of the petitioner and the discretion of the respondent). Petitioner's Arguments: The petitioner argued that they should be allowed to settle the dues under the Sabka Vishwas Scheme, seeking reasonable interest for the delay. Alternatively, they requested reasonable time for payment in installments due to accumulated losses and inability to discharge the liability under the old regime. Respondent's Arguments: The respondent contended that the petitioner failed to avail the Sabka Vishwas Scheme by not paying the admitted liability. The respondent also noted that a significant portion of the demand remains outstanding, with only Rs. 25,00,000 paid out of Rs. 1,46,79,069.