Sanchayita Lahkar

The High Court of Kerala Single Bench of Justice Ziyad Rahman A.A. held that payments made under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 are valid if remitted within the limitation period as extended by the Supreme Court’s suo motu orders during the COVID-19 pandemic, and directed the tax authorities to treat the service tax assessee’s remittance as compliant, set aside the revenue recovery proceedings, and issue the discharge certificate in Form SVLDRS-4. The Court characterised proceedings under SVLDRS as quasi-judicial, thereby bringing them within the scope of the Supreme Court’s extension of limitation, and applied this to a dispute where the revenue authorities had sought to recover the original service tax dues on the ground that the assessee’s scheme payment was made after the prescribed cut-off date.

The petitioner challenged revenue recovery proceedings initiated for alleged outstanding service tax dues. Earlier, show cause notices were issued demanding service tax, followed by adjudication. During this period, the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 was introduced, and the petitioner submitted a declaration under Section 125 of the Finance Act, 2019. The designated committee determined ₹1,05,806 as payable under Section 127(5), which the petitioner was required to remit within 30 days. The Government extended the payment deadline first to 30 June 2020 and later to 30 September 2020. The petitioner remitted the amount on 16 November 2020, and the department accepted the payment.

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Despite this, a revenue recovery notice was issued on 10 June 2022 demanding ₹8,30,851. The petitioner objected before the Tahsildar and the Assistant Commissioner, asserting that the liability had already been settled under the scheme. The department rejected this claim, arguing that the petitioner had failed to comply with the statutory time limit for payment. The petitioner relied on the Supreme Court’s COVID-19 limitation extension orders to contend that the delayed payment should be treated as valid. A counter affidavit stated that the benefit of the scheme required strict adherence to timelines. The dispute centred on whether the Supreme Court’s limitation extensions applied to the SVLDRS payment deadline.

The Court recorded that the petitioner relied on the Supreme Court’s suo motu orders extending limitation due to the COVID-19 pandemic and argued that “even though the period contemplated under Rule 7 of SVLDRS expired on 30.09.2020, as the petitioner affected the payment on 16.11.2020, which falls within the extended time limit… the petitioner is entitled to get the benefit of the scheme.” It noted the petitioner’s reliance on a prior Single Bench judgment in Jewel Homes, holding that payment made after the cut-off date but within the COVID-extended period qualified under the scheme.

The respondents contended that the extension of limitation applied only to judicial or quasi-judicial proceedings and that proceedings under SVLDRS were “mere administrative proceedings,” thereby excluding them from limitation protection. They referred to Supreme Court orders in Yashi Constructions and Ken Computek rejecting extension of time under the scheme.

The Court undertook a detailed examination of Sections 125–127 of the Finance Act, 2019 and Rules 6–9 of the SVLDRS Rules. It observed that the designated committee must verify declarations using departmental records and that “a further enquiry is contemplated after giving the declarant an opportunity for being heard.” It stated that “such a decision cannot be taken upon the personal satisfaction of the authorities… but has to be strictly in accordance with the statutory provisions.” It concluded that the proceedings “amount to a quasi judicial act.”

Referring to the Supreme Court’s order dated 23.09.2021, the Court extracted that limitation extension applied to “any suit, appeal, application or proceeding.” It noted that the order dated 10.01.2022 clarified that the exclusion applied to “all judicial or quasi-judicial proceedings.” Having held SVLDRS proceedings to be quasi-judicial, the Court stated that “I do not find any justifiable reasons to accept the contentions… that the time extension… is not applicable to the Scheme.”

The Court further recorded that the proceedings under the scheme conclude only upon issuance of the discharge certificate, and therefore “even at the time of payment, the proceedings… was in existence.” It stated that, since the petitioner’s payment on 16.11.2020 fell within the extended limitation period, the petitioner was entitled to relief.

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The Court directed: This writ petition is disposed of quashing Exts.P5 and P8, with a direction the 2nd respondent or the competent officer in this regard, to treat the payment made by the petitioner as the one in compliance of Chapter V of Finance Act, 2019 and issue a certificate in SVLDRS-4. This shall be done within a period of two months from the date of receipt of a copy of this judgment.”

Advocates Representing The Parties

For the Petitioner: Shri. Sasidharan I.P., Advocate; Shri. Ramanarayanan G., Advocate.

For the Respondents: Shri. C. Dinesh, Central Government Counsel; Shri. P.T. Dinesh, Advocate.

Case Title: P.P. Paul v. Union of India & Others
Neutral Citation: 2025: KER:78570
Case Number: WP(C) No. 26259 of 2024
Bench: Justice Ziyad Rahman A.A.