Covid-19 Limitation Extensions Apply to SVLDRS: High Court

In a significant ruling for taxpayers, the High Court of Kerala has held that the amnesty period under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) is subject to the limitation extensions granted by the Supreme Court of India during the Covid-19 pandemic. Justice Ziyad Rahman A.A. ruled that proceedings under the scheme are "quasi-judicial" in nature, thereby qualifying for the legal protections regarding time limits prescribed during the pandemic era.

Case Background

The petitioner, P.P. Paul, sought to settle his service tax arrears under the SVLDRS, 2019. While he had submitted a declaration and received an estimate for settlement, he missed the original payment deadline (as extended to September 30, 2020) by a few weeks, making the remittance on November 16, 2020. Despite the Department of Revenue initially accepting the payment, the tax authorities later issued a recovery notice for the original, higher amount, arguing that the petitioner had failed to comply with the strict timelines set by the scheme.

Arguments Presented

The Department of Revenue maintained that the SVLDRS was an administrative scheme. They argued that because it did not involve formal adjudication, it fell outside the scope of Supreme Court orders extending the limitation for "judicial or quasi-judicial" proceedings. To support this, they relied on several verdicts, including instances where the Allahabad and Karnataka High Courts had denied relief to taxpayers who missed strict payment deadlines.

Counsel for the petitioner argued that the process involved verifying declarations against departmental records and providing opportunities for hearing, which clearly established a quasi-judicial character. Relying on the Supreme Court’s suo motu orders, the petitioner contended that the extension of limitation for "all proceedings" during the Covid-19 period should apply to his payment as well, citing similar favorable rulings from the Madras High Court.

Legal Analysis: The Quasi-Judicial Threshold

The Court performed a deep dive into the definition of "quasi-judicial" functions, noting that the presence of a statutory duty to act according to objective standards—rather than subjective satisfaction—is the primary test.

Justice Ziyad Rahman A.A. observed that since the Designated Committee under the SVLDRS was required to verify facts, cross-check records, and permit hearings, their actions were not merely administrative. The court noted: "While carrying out such exercise, the designated authority is under an obligation to act judicially... Under no circumstances, the proceedings or the acts that are being carried out by the designated authority could be treated as a mere administrative action, but on the other hand, it amounts to a quasi judicial act."

The Court distinguished this case from others where relief was denied, emphasizing that the Supreme Court's previous non-interference in other similar cases did not explicitly address whether the pandemic-era limitation extensions applied to the scheme’s deadlines.

Key Observations

• On the Nature of Proceedings: "The proceeding comes to an end only upon the petitioner is issued with a discharge certificate... Therefore, even at the time of payment, the proceedings under the scheme, which is already found be quasi judicial in nature, was in existence."
• On Judicial Duty: "One of the basic requirements to qualify a proceeding as a judicial or quasi judicial proceeding, is that, there must be an obligation upon the authority concerned to act judicially."
• On Pandemic Impact: "I do not find any justifiable reasons to accept the contentions raised by the learned Central Government Counsel that the time extension granted by the Honourable Supreme Court in connection with Covid-19 pandemic is not applicable to the Scheme."

Court's Decision

The High Court quashed the recovery notices (Ext.P5 and P8) and directed the authorities to treat the petitioner's belated payment as valid. The Department must now process the issuance of the SVLDRS-4 discharge certificate within two months. This decision serves as a pivotal precedent, affirming that pandemic-related delays in tax settlements under amnesty schemes are legally excusable provided the taxpayer acted within the extended time frames mandated by the Supreme Court.