23 七月 2019

Coverage of redemption fine under Sabka Vishwas (Legacy Dispute Resolution) Scheme

by Atul Gupta

After introducing the National Tax Litigation Policy to reduce the litigation from the Central Government side by prescribing monetary limits upto which the Government restricted filing of appeals before each appellate authority from the stage of Commissioner (A) to the Supreme Court, the Central Government has now proposed a scheme termed as Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 in the Finance (No. 2) Bill 2019 to reduce/wipe out the litigation pending at various stages.

The language used in the proposed scheme suggests that it encompasses only the matters in which demand of duty, interest and penalty are involved and the monetary relief is also restricted to such issues under clause 128(1)(a). The attention of the Government may be invited by the field formation of the department as well as the Industry that in many of the matters pending, a minor issue of fine in lieu of confiscation of goods, may also be involved simultaneously along with involvement of demand of duty, interest and penalty.

It is to be noted that in cases where goods are not absolutely confiscated, an option to get the goods redeemed after payment of a fine in lieu of confiscation is given to the owner of the goods or the person from whose possession goods were seized. 

At present, amount of fine in lieu of confiscation of goods has not been included either in tax dues and amount in arrears or the amount in respect of which grant of relief has been proposed under the scheme. Therefore, in absence of such specific inclusion of the redemption fine, the department may adopt an interpretation that such matters, in which even though an insignificant amount in respect of redemption fine is involved, will be outside the scope of the proposed scheme. Due to such minor issue, a large number of matters pending may not be settled and will continue to be pending for litigation.

In view of the above, it is expected that the Central Government may certainly take care of such issue and will make appropriate changes in clause 128(1)(a) to include the amount of redemption fine also in the relief granted, so that the scheme may achieve its intended purpose.

 [The author is a Partner, Lakshmikumaran and Sridharan, Allahabad]

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