Natural justice in Sabka Vishwas scheme requires a hearing before rejection of a declaration with civil consequences.

Rejection of a declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 without a hearing was held unsustainable because the Scheme required compliance with Section 127 and the principles of natural justice before any higher payable amount was determined. The Court noted that the designated committee could not reject the declaration mechanically where civil consequences followed from the decision. The matter had to be reconsidered after giving the declarant an opportunity of hearing.

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Issues: Whether rejection of the declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 without granting an opportunity of hearing was sustainable.

Analysis: The Scheme was intended to provide a beneficial mechanism for closure of legacy indirect tax disputes. Section 127 contemplated that where the designated committee proposed to determine an amount higher than the declared amount, the declarant had to be afforded an opportunity of hearing before the statement of payable amount was issued. Since the declaration was rejected in a mechanical manner and the decision entailed civil consequences, compliance with the statutory hearing requirement and the principles of natural justice was necessary.

Conclusion: The rejection was unsustainable. The matter was required to be reconsidered after giving the petitioner an opportunity of hearing.

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