M/S Shoe Sales Corporation vs. Union Of INDIA And Ors

Facts

The petitioners, M/s. Shoe Sales Corporation and M/s. Kapoor International, filed writ petitions challenging the rejection of their applications under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme). The Designated Committee rejected the petitioner's application on December 23, 2019, stating that the matter involved redemption fine, which was not covered by the scheme as it only encompassed demands of duty, interest, and penalty. The petitioner argued that their application was filed on October 14, 2019, against a demand of penalty and redemption fine. The respondents contended that the writ petition was filed with delay, more than a year after the rejection order. The petitioner countered that they only became aware of the rejection on January 1, 2021, and filed the writ petition on January 7, 2021. They also cited Supreme Court orders extending limitation periods due to COVID-19.

Held

The Court held that the rejection of the petitioner's application under the SVLDR Scheme solely on the ground that it involved redemption fine was incorrect. Citing the Gujarat High Court judgment in *Synpol Products Pvt. Ltd. Vs. Union of India*, which was upheld by the Supreme Court, the Court found that the scheme's communications, including flyers and FAQs, indicated a waiver of 'fine' which should be interpreted to include redemption fine. The Court reasoned that the object of the SVLDR Scheme was to reduce litigation, and excluding redemption fine would defeat this purpose, especially for small taxpayers. Regarding the delay, the Court acknowledged the Supreme Court's suo motu orders extending limitation periods due to COVID-19 and noted that the petitioner's delay in filing the writ petition could be condoned in light of the scheme's objective and the erroneous rejection of their application. The Court found no occasion for the petitioner to file a fresh application within the stipulated time after the incorrect rejection. Therefore, the writ petitions were allowed, the orders of the Designated Committee were set aside, and the matter was remanded back to the Designated Committee to reconsider the petitioner's case under the SVLDR Scheme, redetermining the payable amount including redemption fine. The Designated Committee was directed to grant six months for deposit after assessment.

Key Issues

1. Whether redemption fine is covered under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, for the purpose of relief, considering the scheme's stated objective of resolving disputes involving duty, interest, and penalty? Petitioner's arguments: The petitioner contended that the SVLDR Scheme, as communicated through flyers, press releases, and FAQs, clearly stated a full waiver of interest, fine, and penalty, and immunity from prosecution. They relied on the Gujarat High Court judgment in *Synpol Products Pvt. Ltd. Vs. Union of India* and the Allahabad High Court judgment in *M/s. Jay Shree Industries Vs. Union of India*, which held that redemption fine cases could not be excluded and that the term 'fine' in the scheme's communications encompassed redemption fine. They also noted that the Special Leave to Appeal against the Gujarat High Court judgment was dismissed. Revenue's arguments: The respondents argued that the SVLDR Scheme only covered demands of duty, interest, and penalty, and redemption fine was not included. They also raised the issue of delay in filing the writ petition, stating the rejection order was dated December 23, 2019, and served on January 4, 2020, while the petition was filed on January 7, 2021. 2. Whether the writ petition is barred by limitation, considering the delay in filing after the rejection order was communicated?