Assessee Entitled To Discharge Certificate Under Sabka Vishwas Scheme Despite Portal Closure

On 19 January, the Kerala High Court held that the Central tax authorities are legally obliged to issue a discharge certificate under the Sabka Vishwas (Legacy Disputes Resolution) Scheme, 2019, once the assessee has paid the full settlement amount within the prescribed time.

The Court clarified that the non-functioning of the online portal cannot justify withholding the certificate. In such an event, the certificate had to be issued manually, establishing that payment under the scheme creates a binding statutory right to receive the discharge certificate.

Justice Ziyad Rahman A.A. passed the order on a writ petition filed by a works contractor, who complained that despite full payment under the 2019 amnesty scheme, the authorities had failed to issue Form SVLDRS-4, the discharge certificate evidencing settlement of past disputes.

The petitioner had opted for settlement under the Sabka Vishwas Scheme in respect of service tax proceedings and paid the amount determined under the scheme by 30 June 2020, the last date stipulated for payment. However, the competent authority had not issued the discharge certificate.

When the matter came before the Court, the Standing Counsel for the Central Board of Indirect Taxes and Customs (CBIC) conceded that the petitioner had remitted the entire amount under the scheme. It explained It was further admitted that the certificate had not been issued because the online portal created for the scheme was no longer operational.

Rejecting this justification, the Court held that payment of dues within the stipulated time creates a binding obligation on the authorities to issue a discharge certificate. The Bench observed that the closure of the portal could not be cited as a reason to withhold the certificate and that, under such circumstances, the authorities were required to issue it manually.

The Court noted:

“Since it is an admitted fact that the petitioner remitted the entire amount payable as per the Scheme 2019, within the time stipulated therein, the respondents are bound to issue a discharge certificate evidencing the same and exonerating the petitioner from the liability, that was imposed upon it, as per Ext.P1 order-in-original.”

It further clarified:

“If the portal is not functional, it is the obligation of the respondents to issue a manual discharge certificate.”

The Court directed the the competent officer to issue the discharge certificate in the prescribed format under the Sabka Vishwas Scheme, within two months from the date of receipt of the judgment and disposed the petition.