Interpretation of fine under Sabka Vishwas Scheme allows relief from redemption fine for declarants

The Court held that the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 applies to cases involving confiscation and redemption fine. It interpreted "fine" under the Scheme to include redemption fine, directing the acceptance of declarations without payment of redemption fine. The Designated Committee's rejection of declarations involving confiscation and redemption fine was deemed unjustified, and fresh declarations were permitted. The Court emphasized the relevance of CBIC's communications in interpreting the Scheme and quashed the Committee's orders, extending relief to similarly situated declarants to streamline proceedings and provide comprehensive relief from liabilities, including redemption fine.

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Issues Involved:
1. Applicability of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 to cases involving confiscation and redemption fine.
2. Interpretation of "fine" under the Scheme and whether it includes redemption fine.
3. Validity of the Designated Committee's rejection of declarations involving confiscation and redemption fine.
4. Legal implications of FAQs, press notes, and flyers issued by the Central Board of Indirect Taxes and Customs (CBIC) under the Scheme.

Issue-wise Detailed Analysis:

1. Applicability of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 to cases involving confiscation and redemption fine:
The petitioners challenged the rejection of their declarations under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, arguing that the Scheme should apply to cases involving confiscation and redemption fine. The Court noted that Section 125 of the Finance Act, 2019 does not exclude cases involving confiscation and redemption fine from the Scheme. The Court observed that the Scheme's objective is to reduce litigation and provide relief from tax dues, including interest, penalty, and fine. Therefore, cases involving confiscation and redemption fine should be eligible under the Scheme.

2. Interpretation of "fine" under the Scheme and whether it includes redemption fine:
The Court examined whether the term "fine" in the Scheme includes redemption fine. The Designated Committee had rejected the declarations on the ground that the Scheme does not provide for waiver of redemption fine. However, the Court referred to FAQs, press notes, and flyers issued by the CBIC, which stated that the Scheme provides full waiver of interest, penalty, and fine. The Court concluded that the term "fine" in the Scheme should be interpreted to include redemption fine, as it is the only other fine contemplated under the Central Excise Act, 1944. The Court held that the Scheme's intent is to provide relief from all liabilities, including redemption fine.

3. Validity of the Designated Committee's rejection of declarations involving confiscation and redemption fine:
The Court found that the Designated Committee's rejection of the declarations was not justified. The Committee had rejected the declarations on the basis that the Scheme does not cover cases involving confiscation and redemption fine. However, the Court held that the Scheme does not exclude such cases, and the declarations should be accepted. The Court directed the respondents to permit the petitioners to file fresh declarations under the Scheme without payment of redemption fine and process them accordingly.

4. Legal implications of FAQs, press notes, and flyers issued by the Central Board of Indirect Taxes and Customs (CBIC) under the Scheme:
The Court emphasized the importance of FAQs, press notes, and flyers issued by the CBIC in interpreting the Scheme. The Court referred to the Supreme Court's decision in K.P. Varghese v. Income-tax Officer, which held that administrative interpretations and explanations are relevant in construing statutory provisions. The Court noted that the CBIC's communications clearly stated that the Scheme provides waiver of interest, penalty, and fine. Therefore, the Court held that the Designated Committee should consider these communications while interpreting the Scheme and accepting declarations involving confiscation and redemption fine.

Conclusion:
The Court allowed the petition, quashing the impugned orders of the Designated Committee. It directed the respondents to accept fresh declarations under the Scheme without requiring payment of redemption fine. The Court also extended the benefit of its order to similarly situated declarants who had not approached the Court, to avoid multiplicity of proceedings. The Court emphasized that the Scheme's objective is to provide comprehensive relief from all liabilities, including redemption fine, and directed the issuance of discharge certificates under Section 129 of the Finance Act, 2019.

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