Court reinstates declaration under Sabka Vishwas Scheme, orders reevaluation with hearing opportunity

The court set aside the order rejecting the petitioner's declaration under the Sabka Vishwas Scheme, finding that the service tax liability was quantified before the cutoff date. Emphasizing compliance with natural justice principles, the court directed a reconsideration of the declaration, providing the petitioner with a hearing opportunity. The matter was remanded to the designated authority to pass a speaking order within eight weeks. Technical issues hindering access to the scheme's portal were to be resolved. The writ petition was allowed without costs.

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Issues Involved:
1. Eligibility of the petitioner to avail benefits under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
2. Whether the service tax liability of the petitioner was quantified on or before the cutoff date of 30th June 2019.
3. Compliance with principles of natural justice in rejecting the petitioner's declaration.

Issue-wise Detailed Analysis:

1. Eligibility of the petitioner to avail benefits under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019:
The petitioner, a private limited company engaged in construction services, sought to quash the order dated 02.01.2020, which rejected their declaration under the Sabka Vishwas Scheme, 2019. The rejection was based on the ground that the service tax liability was not quantified before the cutoff date of 30.06.2019. The petitioner argued that the service tax liability was admitted by their director on 09.04.2019, thus meeting the criteria for quantification before the cutoff date.

2. Whether the service tax liability of the petitioner was quantified on or before the cutoff date of 30th June 2019:
The court referred to previous judgments, including Thought Blurb Vs. Union of India and M/s G.R.Palle Electricals Vs. Union of India, which clarified that "quantified" means a written communication of the amount of duty payable, including letters intimating duty demand or duty liability admitted during enquiry, investigation, or audit. The petitioner's director had admitted a service tax liability of approximately Rs. 40 to Rs. 45 lakhs on 09.04.2019, which was before the cutoff date. This admission broadly corresponded to the declared amount of Rs. 43,37,865.00. The court concluded that the petitioner's service tax liability was indeed quantified before the cutoff date.

3. Compliance with principles of natural justice in rejecting the petitioner's declaration:
The court emphasized that summary rejection of a declaration without providing an opportunity for the petitioner to explain their position violates principles of natural justice. Referencing the Thought Blurb case, the court noted that when adverse civil consequences are involved, principles of natural justice, such as notice and hearing, must be complied with. The court held that the rejection of the declaration without a hearing was unjustified.

Conclusion:
The court set aside the order dated 02.01.2020 and remanded the matter back to the designated authority to reconsider the petitioner's declaration dated 08.12.2019 as a valid declaration under the Sabka Vishwas Scheme. The respondents were directed to provide an opportunity for a hearing and pass a speaking order within eight weeks. The court also addressed the respondents' technical difficulties in accessing the scheme's portal, suggesting that these issues should be resolved by consulting higher authorities. The writ petition was allowed to the extent mentioned, with no order as to costs.

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