Natural justice in Sabka Vishwas scheme rejections: adverse orders require a fair hearing before deciding quantification

Rejection of an application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 on the ground that the tax dues were not "quantified" under Section 121(r) of the Finance Act (No. 2), 2019 cannot stand where it was passed without hearing the applicant. A quasi-judicial authority must follow natural justice before passing an adverse order, including giving a fair opportunity to explain earlier communications and payments relied on to show quantification. The rejection was therefore liable to be quashed and the matter remitted for fresh consideration after hearing the petitioner.

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Issues: Whether rejection of the petitioner's application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 without affording a hearing was sustainable.

Analysis: The rejection was founded on the view that the tax dues were not "quantified" within the meaning of Section 121(r) of the Finance Act (No.2), 2019. The order, however, was passed unilaterally without giving the petitioner an opportunity to explain the earlier communications and payments relied upon in support of quantification. An order passed by a quasi-judicial authority that adversely affects rights must conform to the principles of natural justice, including a fair opportunity of hearing.

Conclusion: The rejection could not be sustained and was liable to be quashed, with the matter sent back for fresh consideration after hearing the petitioner.

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