The court held that provisions of the Direct Tax Vivad Se Vishwas Act should be interpreted liberally to allow equitable relief in extraordinary circumstances, including the impact of COVID-19 and unforeseen events.

JUDGMENT

Manmohan, J. By way of the present writ petitions, Petitioners seek a direction to the Respondents to accept the declaration/application (Form 1 and Form 2) dated 04th March, 2021 filed by the Petitioners as valid declarations and to accept balance disputed amount as stipulated by Respondents in Forms 3 dated 07th May, 2021 and 22nd June, 2021 issued under Direct Tax Vivad Se Vishwas Act, 2020 (`VSV Act').

ARGUMENTS ON BEHALF OF THE PETITIONER

2. Learned Counsel for the Petitioners stated that Petitioners had filed Form 1 as well as Form 2 within the time stipulated as per the provisions of VSV Act on 04th March, 2021 and Form No. 3 was issued to Petitioners on 07th May, 2021 and 22nd June, 2021. He stated that the Petitioner Companies were unable to pay the disputed amount as determined by Respondents in Form 3 prior to the last date, namely, 31st October, 2021 due to death of a Director of the companies, who was looking after the taxation and other affairs on 20th July, 2021.

3. Learned Counsel for the Petitioners stated that the delay in payment was not intentional and the Petitioners always intended to settle the dispute with the Income tax department and avail the benefit of VSV Act. He contended that not condoning the delay in payment would be against the very object and purpose of the Scheme as the object of the scheme is to reduce litigation and collect revenue.

4. Learned Counsel for Petitioners submitted that the Rajasthan High Court in similar facts in Agroha Electronics Through its Proprietor Vs. Union of India Through Secretary, Ministry of Finance (Department of Revenue) and Anr., S.B.Civil Writ Petition No.10571/2020 dated 25th March, 2021 had directed the Respondents to accept the amount as specified in SVLDRS-3 and give benefit of Sabka Vishwas Scheme to the Petitioners upon payment of interest at the rate of 9% per annum till the date the amount was paid. The relevant portion of the said Judgment relied upon by learned counsel for Petitioners is reproduced hereinbelow:

"After hearing learned counsel for the parties and perusing the material available on record, this Court deems it fit that in the given facts and circumstances that the petitioner is a bona fide businessman and is prepared to pay the amount in question in accordance with the scheme along with interest for the period which he has defaulted in scheme and looking into the extreme pandemic conditions of COVID and the death of the petitioner's father, this is a fit case for invocation of the powers under Article 226 of the Constitution of India.

In view of the above, the present writ petition is allowed and the respondents are directed to accept the amount as specified in SVLDRS-3 Form No.L280120SV301549 dated 28.01.2020 and give the petitioner benefit of Sabka Vishwas Scheme. The amount stipulated to be paid on or before 30.06.2022 shall be accompanied by interest at the rate of 9% per annum till the date the amount is paid. The compliance of this order shall be made by the petitioner within a period of three weeks from today."

ARGUMENTS ON BEHALF OF THE RESPONDENTS

5. Per contra, learned counsel for the Respondents submitted that payment had to be mandatorily made within fifteen days of determination of the demand. He stated that there was no provision permitting the Respondents to extend the time for payment. He submitted that the VSV Act was mandatory in nature as it provided for consequences on account of non-compliance. He specifically relied upon Sections 4(6)(b) and 5(1)&(2) of the VSV Act which are reproduced hereinbelow:

"4.......

xxx xxx xxx xxx

(6) The declaration under sub-section (1) shall be presumed never to have been made if,xxx

xxx xxx xxx

(b) the declarant violates any of the conditions referred to in this Act:

xxx xxx xxx xxx

5(1) The designated authority shall, within a period of fifteen days from the date of receipt of the declaration, by order, determine the amount payable by the declarant in accordance with t