Court overturns order, remands Sabka Vishwas Scheme declaration for review. Emphasis on natural justice.

The Court set aside the order rejecting the petitioner's declaration under the Sabka Vishwas Scheme, 2019, remanding the matter for reconsideration. Emphasizing adherence to natural justice principles, the Court clarified that quantification of tax dues could be based on written communication before the cut-off date, making the petitioner eligible. The designated committee was directed to provide consequential reliefs, grant a hearing, and issue a speaking order within eight weeks.

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Issues Involved:
1. Eligibility under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019
2. Quantification of Tax Dues
3. Principles of Natural Justice

Detailed Analysis:

1. Eligibility under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019

The petitioner sought quashing of the order dated 27.02.2020, which rejected their declaration under the Sabka Vishwas Scheme, 2019. The Court examined whether the petitioner was eligible to file a declaration under the category of "investigation, enquiry, or audit." The respondents argued that the petitioner was ineligible because the quantification of tax dues was not finalized before the cut-off date of 30.06.2019. The Court referred to previous judgments, including *Thought Blurb Vs. Union of India, 2020 (10) TMI 1135*, where it was held that eligibility under the scheme required a written communication of the amount of duty payable, which could include a letter intimating duty demand or duty liability admitted by the person during enquiry, investigation, or audit.

2. Quantification of Tax Dues

The Court analyzed whether the tax dues were quantified before the cut-off date. The petitioner’s authorized representative had acknowledged the service tax liability in statements recorded on 26.11.2018 and 13.03.2019. The Court noted that these admissions were made before the cut-off date of 30.06.2019, making the petitioner eligible to file a declaration under the scheme. The Court reiterated that quantification did not necessarily require completion of investigation or adjudication but could be based on written communication of the amount of duty payable, as clarified in the circular dated 27.08.2019 and FAQs issued by the department.

3. Principles of Natural Justice

The Court found that the designated committee had sought views from DGGI, which responded that the quantification of tax dues was not finalized before 30.06.2019. This information was not furnished to the petitioner, violating the principles of natural justice. The Court emphasized that any document relied upon by an authority, which results in an adverse decision, must be provided to the affected party to allow for an effective defense. The absence of this information rendered the personal hearing granted to the petitioner an empty formality.

Conclusion:

The Court set aside the order dated 27.02.2020, rejecting the petitioner’s declaration and remanded the matter back to the designated committee. The committee was directed to reconsider the declaration as a valid one under the category of "investigation, enquiry, or audit" and provide consequential reliefs. The respondents were instructed to grant an opportunity of hearing to the petitioner and pass a speaking order within eight weeks.

Judgment Summary:

The writ petition was allowed, and the matter was remanded for fresh consideration. The Court underscored the importance of adhering to the principles of natural justice and clarified the eligibility criteria under the Sabka Vishwas Scheme, emphasizing that quantification of tax dues could be based on written communication, not necessarily adjudication.

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