M/S. N.S. Rathinam And Sons Private Limited vs. The Assistant Commissioner Of GST And Central Excise

Facts

The petitioner, M/s.N.S.Rathinam and Sons Pvt Ltd., engaged in storage and warehousing services, was served with an order on 11.10.2019 demanding Rs.69,08,453/- for ineligible Cenvat credit and Rs.16,00,666/- for suppression of taxable value, along with penalty and interest. The petitioner opted for the Sabkha Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS), filing Form-SVLDRS-1 on 24.12.2019. Form SVLDRS-3 was issued on 16.01.2020. The petitioner was unable to make the balance payment within the stipulated period, extended due to COVID-19 lockdown, and made partial payments on 24.06.2022 and 03.10.2022. The respondent authorities rejected the delayed payment, demanding the full original amount with interest. The petitioner filed a writ petition seeking acceptance of their application under SVLDRS by extending the time limit for balance payment.

Held

The Court held that while the petitioner had failed to adhere to the strict timelines of the SVLDRS scheme, the scheme's purpose was for dispute resolution and development. Considering the special facts of the case, including the petitioner's explanation for the delay and the fact that the principal amount due under the scheme had been paid, the Court directed the petitioner to pay interest at 15% per annum from 01.10.2020 until the dates of their respective payments. This payment of interest was intended to ensure the revenue was not prejudiced. The Court ordered that upon payment of this interest, a discharge certificate should be issued. The entire exercise was to be completed within three weeks. This decision was based on the unique circumstances of the case.

Key Issues

1. Whether the petitioner is entitled to an extension of time for making the balance payment under the Sabkha Vishwas (Legacy Dispute Resolution) Scheme, 2019, despite the expiry of the stipulated period, considering the circumstances including the COVID-19 lockdown and the partial payments made. Petitioner's Arguments: The petitioner contended that they were unable to adhere to the payment schedule due to the COVID-19 lockdown and business losses from demonetization. They had made substantial payments and sought an extension to remit the remaining balance, arguing that the scheme was intended for dispute resolution and development. Respondents' Arguments: The respondents argued that the scheme was for a limited period and the petitioner failed to comply with the repayment terms, thus violating Section 127(5) of the Finance Act, 2019, and were ineligible for the scheme's benefits. They relied on various court judgments.