Time Limit For Making Payment Under SLVDRS Scheme is only Directory: Madras HC directs Dept to Issue Discharge Certificate on payment [Read Order]
Time Limit – Time Limit For Making Payment – Payment – SLVDRS Scheme – Directory – taxscan
Time Limit – Time Limit For Making Payment – Payment – SLVDRS Scheme – Directory – taxscan
The Madras High Court has held that the time limit for making payment under Sabka Vishwas Legacy Dispute Resolution Scheme, 2019 (SLVDRS) is only directory.
M/s RR Housing (India) Pvt Ltd., the petitioner prayed to direct the first respondent to consider the payment made by them under the SVLDRS Scheme and also direct the first respondent to issue a discharge certificate in form SVLDRS 4 to the petitioner.
During the Audit, it was found that the petitioner had not paid service tax in respect of the residential flats constructed for the land owners in terms of a Joint Development Agreement and later, the petitioner paid a sum of Rs.44,29,032/- on 02.05.2019, which was not accepted by the Audit Officers, which culminated into issuance of a show cause notice proposing to demand Service Tax at Rs.70,82,343/- along with interest and penalty. The Joint Commissioner of GST and Central Excise confirmed the entire demand for Service Tax proposed in the show cause notice.
A Scheme SVLDRS was introduced to settle the disputes relating to legacy laws, viz., Service Tax, Central Excise Duty, etc., which are pending at various levels, by filing a declaration in Form SVLDRS-1 in the electronic portal.
The petitioner opted to file a declaration under the SVLDRS Scheme in respect of the Service Tax dispute and settle the same and accordingly filed a declaration, upon which, the Designated Committee, after verifying form SVLDRS-1 filed by the petitioner, issued Form SVLDRS-3 on 13.2.2020.
As per the Scheme, the petitioner is liable to pay Rs.14,98,835.20 on or before 14.03.2020. In the meantime, the Government, considering the pandemic situation, has extended the time limit for making payments under the Scheme up to 30.06.2020. However, the petitioner could not pay the tax dues on or before 30.06.2020 due to the financial crisis faced them on account of the lockdown owing to the pandemic situation.
The Supreme Court has extended the period of limitation in all proceedings, irrespective of limitation prescribed under General or Special laws with effect from 15.2.2020 till further orders. Therefore, the petitioner requested the Superintendent, SVLDRS Section to grant some more time to make the payment of Rs.14,98,835.20 since they are facing a major financial crunch due to the pandemic and lockdown. The second respondent directed the petitioner to pay the entire arrears confirmed.
The Supreme Court had extended the time limit up to 28.02.2022, even where the limitation was fixed under the mandatory laws. Further, as discussed above, there is no doubt that the provision of fixing time limit under the SVLDRS Scheme is directory in nature and that is the reason why the Department had extended the time limit for payment of tax amount under the SVLDRS Scheme by notifications.
When that is the case, the Department is supposed to have extended the time at par with the order passed by the Supreme Court, where it had considered the difficulties faced by the public in mobilizing the money, filing the cases before the Courts, etc., and granted the time limit up to 28.02.2022.
The respondent Department had considered and issued the notifications on 3 occasions, thereafter, they had neither considered the difficulties faced by the Assessee nor issued any notifications extending the time limit for making payment of tax under the scheme.
A Single bench of Justice Krishnan Ramasamy observed that the tax was paid by the petitioner based on the Form SVLDRS-3 issued by the Department and the same was accepted by the respondent.
The Court viewed that the amount, that was paid by the petitioner on 02.03.2021 shall be considered as the amount paid under the SVLDRS Scheme and hence, the Department is bound to issue the Form SVLDRS- 4 about the discharge of liabilities.
While allowing the writ petition, the respondents are directed to accept the payment of Rs.14,98,836/- made by the petitioner under SVLDRS-3 on 01.03.2021. The petitioner is directed to pay interest at 15% p.a. on 14,98,836/- from 01.07.2020 till the date of payment, within four weeks and on such payment being made by the petitioner, the respondents are to issue a discharge certificate to the petitioner.
To Read the full text of the Order CLICK HERE
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