Pre-cut-off quantification and hearing rights under the Scheme governed validity of the declaration and rejection process.

For the Scheme, tax dues were treated as quantified if, before the cut-off date, there was a written communication of the duty payable or an admission of liability during inquiry, investigation or audit; exact mathematical precision was not required, so the declaration could not be rejected merely because the departmental computation came later. Where rejection of the declaration carried adverse civil consequences, natural justice required a hearing before the designated committee decided eligibility and relief, so summary rejection without hearing was unsustainable. The rejection order was set aside and the matter remitted for fresh consideration after giving the declarant an opportunity to be heard.

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Issues: (i) Whether the declarant's service tax dues were quantified on or before 30 June 2019 so as to make the declaration maintainable under the inquiry, investigation or audit category of the Scheme. (ii) Whether rejection of the declaration without affording a hearing was sustainable.

Issue (i): Whether the declarant's service tax dues were quantified on or before 30 June 2019 so as to make the declaration maintainable under the inquiry, investigation or audit category of the Scheme.

Analysis: Quantification under the Scheme was treated as a written communication of the amount of duty payable, which may include a demand letter or an admission of liability by the person during inquiry, investigation or audit. Exact mathematical precision or a post-30 June 2019 show-cause notice was not required. The declarant had made statements before the cut-off date admitting substantial service tax liability, and the later departmental figure differing from those admissions did not defeat eligibility.

Conclusion: The declaration could not be rejected on the ground that tax dues were not quantified by 30 June 2019.

Issue (ii): Whether rejection of the declaration without affording a hearing was sustainable.

Analysis: Where the Scheme contemplates consideration of the declarant's case and the rejection carries adverse civil consequences, a summary rejection without giving an opportunity to explain is inconsistent with natural justice. The designated committee was required to hear the declarant before deciding eligibility and entitlement to relief.

Conclusion: The rejection without hearing was unsustainable.

Final Conclusion: The rejection order was set aside and the matter was remitted for fresh consideration of the declaration under the Scheme after granting an opportunity of hearing.

Ratio Decidendi: For the Scheme, quantification is satisfied by a pre-cut-off written communication or admission of duty liability during inquiry, investigation or audit, and a declaration carrying adverse civil consequences cannot be summarily rejected without affording a hearing.

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