Court-caused delay in appeal withdrawal cannot defeat SVLDRS discharge after timely payment.

The petitioner faced a show-cause notice dated 09.12.2005 concerning alleged wrongful availment of CENVAT credit on outward transportation services for November 2004–September 2005. The demand was confirmed by the CESTAT and was challenged by the petitioner in CMA No. 1591 of 2009 before the Madras High Court.

During the pendency of the appeal, the petitioner filed a declaration in Form SVLDRS-1 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 on 24.12.2019 and paid the amount quantified in Form SVLDRS-3 on 04.03.2020 and 06.03.2020, before the extended deadline of 30.06.2020.

The petitioner sought withdrawal of the pending appeal and made a request before the High Court on 06.07.2020. Owing to the COVID-19 pandemic, the appeal was ultimately permitted to be withdrawn only on 16.09.2021. The petitioner communicated the withdrawal order to the Department on 15.03.2022.

Its subsequent request for issuance of Form SVLDRS-4 was rejected on the ground that the Scheme had closed and that the case did not fall within the Board’s instructions for manual processing.

The respondents thereafter passed Order-in-Original No. 34/2023-GST (AC), dated 21.11.2023, reviving or proceeding with the demand.

Whether the petitioner, having made payment within the prescribed period and having taken steps to withdraw the pending appeal while the SVLDRS was in force, could be denied Form SVLDRS-4 merely because the appeal was formally withdrawn and communicated after closure of the Scheme.

Whether the respondents were required to process and issue the discharge certificate manually when electronic processing was no longer available.

Whether the subsequent Order-in-Original dated 21.11.2023 was sustainable after the petitioner had substantially complied with the requirements of the Scheme.

The Court applied Sections 127(7) and 127(8) of the Finance (No. 2) Act, 2019: Section 127(7) requires withdrawal of pending litigation and production of proof thereof, while Section 127(8) requires issuance of the discharge certificate within thirty days of payment and production of proof of withdrawal, whichever is later.

Rule 7 of the Sabka Vishwas Rules, 2019, as amended by Notification No. 01/2020-Central Excise-Non-Tariff dated 14.05.2020, extended the payment deadline to 30.06.2020.

Rule 9 requires the Designated Committee to issue Form SVLDRS-4 upon satisfaction regarding payment and submission of proof of withdrawal.

The Court distinguished substantive requirements—payment and withdrawal of litigation—from the procedural requirement of intimating the authority.

It relied on M/s R.R. Housing (India) Pvt. Ltd. v. Designated Committee (SVLDRS), holding that the prescribed timeline was directory, and M/s Sir Gujan Builder v. Designated Committee, holding that once the essential requirements are fulfilled, the Department cannot refuse the discharge certificate on procedural grounds.

The maxim actus curiae neminem gravabit—an act of the Court shall prejudice no person—was applied with reference to Mithilesh Kumari v. Prem Behari Khare and A.R. Antulay v. R.S. Nayak.

The Court found that the petitioner had paid the amount determined under Form SVLDRS-3 within time and had initiated withdrawal of the pending appeal during the subsistence of the Scheme.

The formal withdrawal occurred later only because the appeal could not be listed promptly during the COVID-19 pandemic, a circumstance beyond the petitioner’s control.

Since the Scheme did not prescribe a specific time limit for withdrawal of the pending proceedings, and since the petitioner had already taken timely steps to secure withdrawal, the Court treated the later formal withdrawal and communication as procedural matters rather than failures of substantive compliance.

Applying the principle that no person should suffer because of an act or delay attributable to the Court, the respondents could not rely on the subsequent closure of the electronic portal to defeat an otherwise valid settlement.

The Designated Committee was therefore required to process the request manually instead of reviving the adjudication proceedings.

The first respondent was directed to process the petitioner’s request manually and issue the discharge certificate within four weeks from receipt of the order.

Consequently, Order-in-Original No. 34/2023-GST (AC), dated 21.11.2023, was also set aside as unsustainable.