Arrears category eligibility under Sabka Vishwas depends on finality of demand, and rejection needs notice and hearing.

A declarant under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 could still qualify under the arrears category where the show-cause proceedings had reached final hearing before the cut-off date, but the adjudication order was passed later and the appeal period had expired without an appeal. The scheme's arrears route turns on duty becoming recoverable after expiry of limitation or on finality of the order, and the Court treated the Board's circulars as supporting that position. A rejection of the declaration by a non-speaking order, without notice, hearing, or reasons, was also held contrary to natural justice because adverse action under the scheme carries civil consequences. The matter was remanded for fresh consideration.

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Issues: (i) Whether a declarant whose show-cause notice had reached final hearing before 30 June 2019, but whose adjudication order was passed later and no appeal was filed within limitation, was eligible to file a declaration under the arrears category of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019; (ii) Whether rejection of the declaration without notice, hearing, or reasons was valid.

Issue (i): Whether a declarant whose show-cause notice had reached final hearing before 30 June 2019, but whose adjudication order was passed later and no appeal was filed within limitation, was eligible to file a declaration under the arrears category of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.

Analysis: The scheme distinguishes between litigation category and arrears category. Amount in arrears is linked to duty recoverable after expiry of the appeal period or where no appeal has been filed. Although section 125(1)(c) excludes cases where final hearing had taken place on or before 30 June 2019, the Board's circulars clarified that such cases may still enter the arrears category once the adjudication order is passed and the appeal period is over or the order attains finality. The factual position showed that the order in original was passed after the cut-off date and the declaration was filed after the appeal period had expired.

Conclusion: The declarant was eligible to make a declaration under the arrears category, and the rejection on the ground of ineligibility was unsustainable.

Issue (ii): Whether rejection of the declaration without notice, hearing, or reasons was valid.

Analysis: The rejection order was non-speaking and was not preceded by any opportunity to explain the claim. The scheme itself contemplates a hearing where the Designated Committee's estimate exceeds the declaration, and the Court treated summary rejection without notice as contrary to the object of the scheme. Since the declaration carried civil consequences, the principles of natural justice required notice and hearing before adverse action.

Conclusion: The rejection was invalid for breach of natural justice.

Final Conclusion: The impugned rejection was set aside, the declaration was to be treated as valid, and the matter was remanded to the Designated Committee for fresh consideration and consequential relief under the scheme after hearing the declarant.

Ratio Decidendi: A declaration under the arrears category of the scheme cannot be rejected merely because final hearing in the underlying adjudication concluded before the cut-off date, if the adjudication order was passed later and the appeal period had expired, and any adverse rejection under the scheme must comply with notice and hearing where civil consequences follow.

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