Court overturns rejection of Sabka Vishwas Scheme application, orders reconsideration and speaking order

The court held that the rejection of the petitioner's application under the Sabka Vishwas Scheme, 2019 was unjustified. It set aside the rejection and directed the Designated Committee to reconsider the application after affording the petitioner an opportunity of hearing. The decision should be a speaking order, in line with the court's discussions. The writ petition was allowed, with no order as to costs.

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Issues Involved:
1. Eligibility of the petitioner under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
2. Quantification of tax dues on or before 30th June, 2019.
3. Violation of principles of natural justice due to non-affording of an opportunity of hearing.
4. Discrepancy in declared tax dues for the period 1st April, 2017 to 30th June, 2017.
5. Liberal interpretation of the scheme to achieve its objectives.

Detailed Analysis:

1. Eligibility of the petitioner under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019:
The petitioner sought quashing of the rejection of its application under the Sabka Vishwas Scheme, 2019. The petitioner argued that it was eligible under the scheme as the tax dues were quantified before the cut-off date of 30th June, 2019. The court noted that the scheme aimed to liquidate past disputes of central excise and service tax and ensure disclosure of unpaid taxes. The petitioner’s eligibility hinged on whether the tax dues were quantified before the cut-off date.

2. Quantification of tax dues on or before 30th June, 2019:
The petitioner’s tax dues for the period 1st April, 2016 to 31st March, 2017 were quantified at Rs. 47,44,937.00 by the respondents’ letter dated 21st May, 2019. For the period 1st April, 2017 to 30th June, 2017, the petitioner admitted a liability of Rs. 10,74,011.00 in its letter dated 18th June, 2019. The court held that these amounts were quantified before the cut-off date, making the petitioner eligible under the scheme.

3. Violation of principles of natural justice due to non-affording of an opportunity of hearing:
The petitioner contended that the rejection of its application without a hearing violated principles of natural justice. The court agreed, stating that summary rejection without a hearing was contrary to the principles of natural justice and the scheme’s intent. The Designated Committee should have given the petitioner an opportunity to explain its case before rejecting the application.

4. Discrepancy in declared tax dues for the period 1st April, 2017 to 30th June, 2017:
The petitioner declared Rs. 12,09,732.00 for the period 1st April, 2017 to 30th June, 2017 in its application, differing from the admitted liability of Rs. 10,74,011.00. The court noted that this discrepancy was due to a calculation error and could have been rectified if a hearing was granted. The court emphasized that the mistake did not materially affect the petitioner’s claim or the relief available under the scheme.

5. Liberal interpretation of the scheme to achieve its objectives:
The court highlighted the scheme’s objective to unload the baggage of pending litigations from the pre-GST regime and allow businesses to move forward. It cited the Hon’ble Finance Minister’s budget speech and the Central Board of Indirect Taxes and Customs’ circular, which called for a liberal interpretation of the scheme. The court stressed that the scheme’s success depended on a liberal approach embedded with principles of natural justice.

Conclusion:
The court held that the rejection of the petitioner’s application under the scheme was unjustified. It set aside the rejection and directed the Designated Committee to reconsider the application after affording the petitioner an opportunity of hearing. The decision should be a speaking order, keeping in mind the court’s discussions. The writ petition was allowed, with no order as to costs.

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