M/S Brittman INDIA PVT. LTD. vs. Union Of INDIA

Facts

M/s Brittman India Pvt. Ltd. (the petitioner) had outstanding service tax dues of Rs. 1,51,15,377.72 for the period April 2014 to June 2017. To resolve this, the petitioner filed a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme (SVLDRS) on December 30, 2019, declaring the tax dues as Rs. 1,51,15,378/-. The Designated Committee issued an estimate on March 16, 2020, requiring payment by April 16, 2020. Due to the COVID-19 pandemic and nationwide lockdown, the payment deadline was extended to June 30, 2020. The petitioner attempted to make the payment on June 29-30, 2020, but encountered technical errors on the SVLDRS portal. The payment was debited from the petitioner's bank account on June 30, 2020, and credited to the government account on July 1, 2020. The respondent authorities rejected the declaration and refused to issue a Discharge Certificate, citing non-payment within the stipulated time. The petitioner sought a direction to issue the Discharge Certificate.

Held

The Court held that the respondent authorities were not justified in rejecting the petitioner's declaration and refusing to issue the Discharge Certificate. The Court found that the payment of Rs. 1,51,15,378/- was debited from the petitioner's bank account on June 30, 2020, which, for all intents and purposes, amounts to making the payment. The Court acknowledged that there was a time lag between the debit from the petitioner's account and the credit to the government account, with the latter occurring on July 1, 2020. However, the Court emphasized that the petitioner was not at fault for this delay, attributing it to technical issues with the electronic portal and the circumstances arising from the COVID-19 pandemic. The Court reasoned that the SVLDRS is a benevolent scheme aimed at resolving disputes, and the legislative intent was to provide relief to taxpayers. The Court concluded that the debit from the petitioner's bank account on the due date should be considered a valid payment under Rule 7 of the Rules. Therefore, the impugned decision rejecting the declaration was quashed, and the Designated Committee was directed to issue the Discharge Certificate considering the payment made on June 30, 2020, and credited on July 1, 2020, as valid within the stipulated time. The exercise was to be completed within four weeks.

Key Issues

1. Whether the respondent authorities were justified in rejecting the petitioner's declaration under the SVLDRS and refusing to issue a Discharge Certificate on the ground that the payment was not made within the stipulated time as per Rule 7 of the SVLDRS Rules, 2019, considering the payment was debited from the petitioner's bank account on June 30, 2020, but credited to the government account on July 1, 2020? (Question of law and fact, concerning Rule 7 of the SVLDRS Rules, 2019 and the intent of the SVLDRS Scheme). Petitioner's Arguments: The petitioner argued that the payment was effectively made on June 30, 2020, as the amount was debited from their bank account on that date. They contended that the delay in credit to the government account was due to technical glitches on the SVLDRS portal and the nationwide lockdown, for which they were not at fault. They relied on the benevolent nature of the SVLDRS Scheme, intended to resolve disputes. The petitioner asserted that the debit from their account on the stipulated date should be considered as compliance with Rule 7. Revenue's Arguments: The respondent authorities contended that the payment was not made within the stipulated time as the amount was credited to the government account on July 1, 2020, which was after the extended deadline of June 30, 2020. They argued that the SVLDRS Scheme required actual credit to the government exchequer by the due date.