Dynamik Business System vs. Commissioner Central Goods And Services Tax And Ors

Facts

The petitioner, Dynamik Business System, filed 9 applications under the Sabka Vishwas (Legacy Disputes Resolution) Scheme (SVLDRS) for the tax period not specified. The designated committee allowed 6 applications, and the petitioner deposited the tax accordingly. However, for the remaining 3 applications, the respondents issued SVLDRS-3 forms without adjusting the pre-deposit made by the petitioner at the time of filing appeals. These SVLDRS-3 forms, dated 15.01.2020 and 16.01.2020 (Annexures P12, P-13, P-14), are under challenge. A subsequent request by the petitioner to adjust this pre-deposit was rejected by order dated 04.08.2020 (Annexure P-20).

Held

The Court held that the rejection of the petitioner's application for adjustment of pre-deposits was based on a technical ground that was not equitable. The order dated 04.08.2020 (Annexure P-20), which rejected the adjustment on the basis of a 30-day window for rectification of SVLDRS-3 forms, was set aside. The Court found that the pre-deposit was not disputed by the respondents. Therefore, the matter was remanded back to the competent authority (respondent No.2, the designated committee) to adjust the undisputed pre-deposit and thereafter issue fresh, correct SVLDRS-3 forms concerning Annexures P12 to P-14, in accordance with the law. The ratio decidendi is that undisputed pre-deposits made by taxpayers under legacy dispute resolution schemes should be adjusted, and technical procedural limitations should not prevent such adjustments when they are otherwise warranted and not disputed.

Key Issues

1. Whether the respondents were justified in refusing to adjust the pre-deposit made by the petitioner against the tax liability under the SVLDRS scheme for the 3 disputed applications, thereby issuing SVLDRS-3 forms without accounting for the said pre-deposit? (Question of law) Petitioner's Contention: The petitioner argued that the pre-deposit made was undisputed and should have been adjusted. The rejection of their request based on a technical ground of time limitation for rectifying SVLDRS-3 forms was unjust. The petitioner relied on the principle that undisputed pre-deposits should be adjusted to grant the benefit of the scheme. Respondents' Contention: The respondents contended that rectified SVLDRS-3 forms could only be issued within 30 days of the issuance of the SVLDRS Scheme, and beyond that period, corrections, including the adjustment of pre-deposits, could not be made. They relied on the internal procedural limitations of the SVLDRS scheme.