Madras High Court Orders Manual Processing of Discharge Certificate Under Sabka Vishwas Scheme — Sir Gujan Builder Case

Background and Context

The Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 was introduced with the primary objective of resolving long-pending service tax and central excise disputes by offering eligible declarants a one-time settlement opportunity. Once an assessee complied with all scheme requirements — including filing the prescribed declaration and remitting the determined tax dues — the logical and necessary culmination of the process was the issuance of a discharge certificate in Form SVLDRS-4. This certificate serves as conclusive proof that the assessee's liability under the scheme stands extinguished.

The Madras High Court recently examined a situation where, despite full compliance by the assessee, the Designated Committee refused to issue the discharge certificate on purely administrative grounds — specifically, citing the unavailability of a manual processing mechanism. The Court's ruling in Sir Gujan Builder Vs Designated Committee and Others (Madras High Court) offers important clarity on the limits of such administrative objections and affirms that procedural constraints internal to a government department cannot be used to deny a settled legal entitlement.

Facts of the Case

The Assessee and Scheme Participation

M/s. Sir Gujan Builder, the petitioner, had an outstanding service tax liability and chose to resolve it by opting into the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. Following the prescribed procedure under the scheme:

• The assessee submitted a declaration in Form SVLDRS-1
• The Designated Committee processed the declaration and issued Form SVLDRS-2, communicating the amount determined as payable
• The assessee duly remitted the determined amount

The NIL Liability Position

At an intermediate stage, an electronic communication from the department suggested that a further amount of Rs. 37,89,582/- remained outstanding against the assessee. The assessee disputed this and sought clarification. Upon review, the Designated Committee acknowledged that no further liability existed, and the amount payable was formally recorded as NIL. A departmental electronic record available on the Sabka Vishwas Designated Committee's website, dated 14 October 2020, confirmed this NIL status.

Effectively, by 14 July 2020, all substantive proceedings under the scheme had been concluded from the assessee's side. The only remaining step was the issuance of the discharge certificate in Form SVLDRS-4.

The Request and Its Rejection

Nearly two years after the NIL determination, the assessee formally requested issuance of the Form SVLDRS-4 discharge certificate on 7 February 2022. The Designated Committee, however, rejected this request on 22 February 2022. The rejection order stated as follows: