Vasanthakumar S vs. The Commissioner

Facts

The petitioner, S. Vasanthakumar, engaged in erection, commission, and installation services, was found to owe service tax and penalty for the year 2007 by an order dated 06.04.2012. Subsequently, the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 was introduced. The petitioner was directed by respondents 3 and 4 to pay Rs. 4,75,751.20/- towards service dues and a penalty of Rs. 17,59,920/-. The petitioner remitted the service tax dues of Rs. 4,75,751.20/- via RTGS on 30.07.2020, believing it was a full compliance. However, on 17.02.2023, he learned his bank account was frozen due to a notice dated 10.02.2023 from the Central Board of Indirect Taxes and Customs. He then submitted a Demand Draft for the sum on 21.02.2023 and a representation on 22.02.2023 to the first respondent seeking acceptance of the belated payment under the scheme. The respondents took no action, leading to the filing of this writ petition.

Held

The Court acknowledged that the Sabka Vishwas Scheme had a limited shelf life and the respondents lacked the jurisdiction to extend it. However, the Court also recognized its power to direct taxing authorities to consider receiving belated payments to ensure assessees fulfill their tax obligations. Drawing inspiration from prior precedents that allowed for such considerations, the Court aimed to find a via media. The Court directed the respondents to consider the petitioner's representation dated 22.02.2023 and pass appropriate orders on merits and in accordance with law within one month of receiving a copy of the order. Crucially, while considering the representation, the respondents were directed to bear in mind that the entire amount had been paid by the petitioner on 30.07.2020 through RTGS. The Court made no order as to costs. No specific issue was left undecided.

Key Issues

1. Whether the Court can direct the respondents to consider accepting the belated payment of tax dues under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, despite the scheme's limited period, in light of the petitioner's bona fide actions and previous court orders? (Question of law and mixed fact and law, turning on the interpretation and application of the Sabka Vishwas Scheme and judicial precedents). Petitioner's arguments: The petitioner argued that he demonstrated bona fide by remitting the demanded amount and is willing to pay interest on the sum from the date of re-crediting until payment. He relied on this Court's order in Jai Guru Cables - Vs - The Principal Chief Commissioner of GST (WP (MD) No.4260/2022 dated 01.04.2022) as a precedent for accepting belated payments. Respondents' arguments: The respondents contended that the Sabka Vishwas Scheme was for a limited period and the authorities have no power to extend it. They also expressed disbelief that the petitioner was unaware of the amount's re-transfer on 30.07.2020 until February 2023, citing his bank account's active transaction history.