Natural justice under the Sabka Vishwas Scheme barred enhanced tax demand without hearing and disclosure of the basis.

Under the Sabka Vishwas Scheme, enhancement of the declarant's payable amount in Form SVLDRS-3 without disclosure of the verification material and without a further hearing breached natural justice and was unsustainable. The competent authority was also required to decide the rectification application under the Scheme; its failure to pass a proper order did not satisfy the prescribed mechanism. Because the enhanced determination and rectification process were vitiated, Form SVLDRS-3 and the discharge certificate could not stand and were quashed, with the matter remitted for fresh consideration after hearing the declarant.

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Issues: (i) Whether the enhanced amount reflected in Form SVLDRS-3 could be sustained without giving the declarant an opportunity of hearing and access to the basis of enhancement; (ii) Whether the failure to pass an order on the rectification application under the Scheme was lawful; (iii) Whether the impugned forms and consequent discharge certificate were liable to be set aside.

Issue (i): Whether the enhanced amount reflected in Form SVLDRS-3 could be sustained without giving the declarant an opportunity of hearing and access to the basis of enhancement.

Analysis: The Scheme contemplated estimation, hearing where the amount payable was enhanced, and issuance of the final statement on a fair and transparent basis. The amount shown in Form SVLDRS-2 had been accepted by the declarant, yet Form SVLDRS-3 enhanced the payable amount without sharing the verification material and without affording a further opportunity to meet the adverse material. When civil consequences follow, notice and hearing are integral to a valid decision-making process.

Conclusion: The enhancement in Form SVLDRS-3 was unsustainable and was held to be in breach of natural justice, in favour of the Assessee.

Issue (ii): Whether the failure to pass an order on the rectification application under the Scheme was lawful.

Analysis: The Scheme permitted rectification of arithmetical or clerical errors apparent on the face of the record, and required the competent authority to act on such an application. The response of the authority, without passing a proper order, did not satisfy the statutory mechanism for rectification.

Conclusion: The omission to decide the rectification application in accordance with the Scheme was unlawful, in favour of the Assessee.

Issue (iii): Whether the impugned forms and consequent discharge certificate were liable to be set aside.

Analysis: Since the enhancement of the amount payable was vitiated and the rectification request was not duly addressed, the downstream administrative action founded on that defective process could not be sustained. The matter required reconsideration after hearing the declarant and considering the material including the payment made under protest.

Conclusion: Form SVLDRS-3 and the discharge certificate were quashed and the matter was remitted for fresh consideration, in favour of the Assessee.

Final Conclusion: The petition succeeded to the extent that the impugned determination was invalidated and the Designated Committee was directed to reconsider the matter afresh after hearing the declarant and applying the Scheme lawfully.

Ratio Decidendi: Under the Sabka Vishwas Scheme, enhancement of the declarant's payable amount without notice and hearing, and without a reasoned order on rectification, violates natural justice and cannot be sustained.

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