M/S L G Chaudhary vs. Union Of INDIA
Held
The Court held that the petitioner made bona fide attempts to pay the determined amount of Rs. 38,64,256/- within the stipulated time, but technical issues with the receiving bank prevented the payment from being credited. The Court found that the substantive benefit of the Scheme should not be denied due to procedural technicalities, especially in the context of the COVID-19 pandemic. The Court distinguished the case from Yashi Constructions, stating that the petitioner's attempt was within the extended period and thwarted by external technical factors, not a failure to comply with the Scheme's core requirements. The Court invoked its powers under Article 226 of the Constitution. The impugned order-in-original dated 04.01.2021 was quashed and set aside. The respondent authorities were directed to accept the payment of Rs. 38,64,256/- along with interest at 9% per annum from 30.06.2020 until the date of payment, and grant the Scheme's benefit. The petitioner was directed to deposit the amount with interest by 15.11.2022.
Facts
The petitioner, M/s L G Chaudhary, a partnership firm engaged in road construction, faced investigation for alleged service tax evasion from 2011-12 to 2014-15. A show-cause notice was issued on 03.01.2017. During pendency, the petitioner opted for the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, filing a declaration on 25.12.2019, self-assessing liability at Rs. 38,64,255.50. The Designated Committee issued Form SVLDRS-3 on 16.03.2020, determining the payable amount as Rs. 38,64,255.50. The payment deadline was initially 16.04.2020, extended to 30.06.2020 due to COVID-19. The petitioner attempted online payment on 30.06.2020, but it failed due to technical issues with the receiving bank. Subsequent attempts on 02.07.2020 and 03.07.2020 also failed. The petitioner requested to pay via demand draft, but the Joint Commissioner passed an order-in-original on 04.01.2021, demanding Rs. 1,87,36,448/-. A recovery notice followed on 23.02.2021.
Key Issues
1. Whether the petitioner is entitled to avail the benefit of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, despite failing to make the payment within the extended deadline of 30.06.2020 due to technical glitches, and whether the Supreme Court's order extending limitation periods due to COVID-19 is applicable. (Section 127(5) of the Finance Act (No.2), 2019, Rule 7 of the Rules, Article 226 of the Constitution of India). Petitioner's arguments: The petitioner contended that they made bona fide attempts to pay the determined amount within the extended period but were prevented by technical issues with the bank. They relied on the Supreme Court's order in suo motu Writ Petition (Civil) No. 3 of 2020, excluding the period from 15.03.2020 to 14.03.2021 for limitation. They also pointed to Board instructions allowing manual processing under certain conditions. Revenue's arguments: The revenue argued that the authorities had no power to extend the time limit beyond 30.06.2020. They cited the Supreme Court's decision in Yashi Constructions vs. Union of India, stating that availing a scheme requires strict adherence to its terms and conditions, and extending time not provided for would amount to modifying the scheme, which is the Government's prerogative. They asserted the petitioner failed to follow the prescribed procedure.
Sections Cited
Section 127(5), Rule 7, Section 125, Section 127, Section 73(1), Section 75, Section 77(1), Section 78, Article 226
AI-generated summary — verify with the full judgment below
C/SCA/12366/2021 JUDGMENT DATED: 14/10/2022 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 12366 of 2021
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE N.V.ANJARIA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA ========================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ? ========================================================== M/S L G CHAUDHARY Versus UNION OF INDIA ========================================================== Appearance: MR ANAND NAINAWATI(5970) for the Petitioner(s) No. 1 NOTICE SERVED BY DS for the Respondent(s) No. 1,4,5 PRIYANK P LODHA(7852) for the Respondent(s) No. 2,3 ========================================================== CORAM:HONOURABLE MR. JUSTICE N.V.ANJARIA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA
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