2023 (1) TMI 256 - SC - Service Tax
CIRP - Successful resolution applicant - Demand of service tax - SVLDRS - Seeking direction to the respondents for consideration of the case of the petitioner under the scheme Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - seeking direction to respondents to appropriate the payment of Rs.1,24,28,500/- towards settlement dues under the Scheme 2019 and that discharge certificate be issued to the appellant accordingly - moratorium is under force.
HELD THAT:- It is required to be noted and it is not in dispute that the appellant is entitled to the benefit of the settlement under the Scheme, 2019. The Scheme, 2019 came to be introduced on 01.09.2019 and the last date for making the application under the Scheme was 30.12.2019 and in fact, the appellant submitted the application in Form No.1 on 27.12.2019 i.e. before the last date specified for making an application. Under the Scheme, after the Form No.1 is processed the Designated Committee was to scrutinize the same and issue the Final Form No.3 determining the settlement amount which the applicant was required to deposit within a period of one month from the date of receipt of the final determination – Form No.3. That the appellant was issued the Form No.3 on 25.02.2020 and was required to pay the settlement dues on or before 25.03.2020. However, in view of the COVID-19 Pandemic the Government extended the time upto 30.06.2020. Therefore, the appellant was required to deposit the settlement dues on or before 30.06.2020. However, even before the Scheme, 2019 came to be introduced, the appellant was subjected to proceedings under the IBC which commenced on 11.09.2018 when the NCLT admitted the application under Section 7 of the IBC. Thus, the moratorium under the IBC commenced on 11.09.2018. The CoC approved the Resolution Plan on 04.06.2019, and the same came to be approved by the NCLT by Order dated 24.07.2020. Therefore, the moratorium under the IBC continued upto 24.07.2020. Under the provisions of the IBC no payment could have been made during the period of moratorium. Therefore, the appellant was statutorily restrained/debarred from making any payment.
Whether, when it was impossible for the appellant to deposit the settlement amount in view of the bar and/or the restrictions under the IBC, the appellant can be punished for no fault of the appellant? - HELD THAT:- In the case of GYANI CHAND VERSUS STATE OF A.P. [2016 (9) TMI 1491 - SUPREME COURT] it was observed by this Court that it would not be fair on the part of the Court to give a direction to do something which is impossible and if a person has been directed to do something which is impossible, and if he fails to do so, he cannot be held guilty - Applying the law laid down by this Court in the aforesaid decision to the facts of the case on hand, the appellant cannot be punished for not doing something which was impossible for it to do. There was a legal impediment in the way of the appellant to make any payment during the moratorium. Even if the appellant wanted to deposit settlement amount within the stipulated period, it could not do so in view of the bar under the IBC as, during the moratorium, no payment could have been made. In that view of the matter, the appellant cannot be rendered remediless and should not be made to suffer due to a legal impediment which was the reason for it and/or not doing the act within the prescribed time.
As the appellant was not in a position to deposit the settlement amount at the relevant time, more particularly on or before 30.06.2020 due to legal impediment and the bar to make the payment of settlement amount in view of the mortarium under the IBC, and as it is found that the appellant was otherwise entitled to the benefit under the Scheme as the Form No.1 submitted by the appellant has been accepted, the Form No.3 determining the settlement amount has been issued, the High Court has erred in refusing to grant any relief to the appellant as prayed.
The impugned judgment and order passed by the High Court is hereby quashed and set aside. It is directed that the payment of Rs.1,24,28,500/- already deposited by the appellant be appropriated towards settlement dues under “Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019” and the appellant be issued discharge certificate - Appeal allowed.