Court overturns rejection of petitioner's declaration, stresses right to hearing. Respondent directed to reconsider. Writ petition allowed.

The court set aside the decision rejecting the petitioner's declaration under the litigation category, emphasizing the importance of granting an opportunity of hearing before rejection. Respondent No.2 was directed to reconsider the declaration after providing a due opportunity of hearing. The subsequent declaration under the arrears category was not examined due to the incorrect rejection of the first application. The writ petition was allowed with no costs.

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Issues Involved:
1. Rejection of the petitioner's application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 under the "litigation" category.
2. Rejection of the petitioner's subsequent application under the "arrears" category.
3. Eligibility criteria under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
4. Principles of natural justice and opportunity of hearing.

Detailed Analysis:

1. Rejection of the Petitioner's Application under the "Litigation" Category:
The petitioners sought quashing of the rejection of their application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, by respondent No.2 on 13.01.2020. The rejection was based on the ground of ineligibility, as the appeal was finally heard before 30.06.2019 by CESTAT. The petitioners argued that the rejection was erroneous since, as of the date of the declaration, the appeal had been disposed of by setting aside the original order and remanding the matter back to the adjudicating authority. The court noted that the order-in-original dated 16.06.2015 had been set aside by CESTAT, and the matter was remanded for a fresh decision, primarily on the ground of limitation. Therefore, the petitioners were reverted to the stage of the show cause notice, and no fresh adjudication order was passed. The court held that the rejection on the ground of ineligibility was incorrect as the petitioners were eligible to file a declaration under the litigation category.

2. Rejection of the Petitioner's Subsequent Application under the "Arrears" Category:
The petitioners also sought quashing of the rejection of their subsequent application under the "arrears" category on 30.01.2020. The rejection was based on the ground that the case had been remanded back for a decision by the competent authority in November 2019, and the issue had not yet attained finality as of the date of the declaration. The court noted that the rejection of the subsequent declaration on the ground of ineligibility due to the remand for fresh decision was contrary to the reasons given for rejecting the first declaration. The court observed that the designated committee had taken into consideration relevant factors post 30.06.2019 while determining eligibility.

3. Eligibility Criteria under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019:
The court examined the provisions of the scheme, particularly sections 124 and 125 of the Finance (No.2) Act, 2019. Section 124(1)(a) provides relief to a declarant where the tax dues are relatable to a show cause notice or one or more appeals pending as on 30.06.2019. Section 125(1)(a) states that a person whose appeal was finally heard on or before 30.06.2019 would be ineligible to make a declaration. The court referred to the FAQs issued by the Board, which clarified that post 30.06.2019 developments could be considered for determining eligibility. The court concluded that the petitioners were eligible to file a declaration under the litigation category as the original order was set aside, and the matter was remanded for a fresh decision.

4. Principles of Natural Justice and Opportunity of Hearing:
The court emphasized the importance of granting an opportunity of hearing to the petitioners before rejecting their declarations. The petitioners were not granted any hearing before the rejection of both declarations. The court held that the rejection of the declarations without granting an opportunity of hearing violated the principles of natural justice. The court directed respondent No.2 to take a fresh decision on the petitioners' declaration under the litigation category after granting a due opportunity of hearing.

Conclusion:
The court set aside the decision of respondent No.2 dated 13.01.2020, rejecting the petitioner's declaration under the litigation category, and remanded the matter back to respondent No.2 for a fresh decision in accordance with law after granting a due opportunity of hearing to the petitioners. The court did not proceed to examine the subsequent declaration under the arrears category as the first rejection was found to be incorrect. The writ petition was allowed to the extent indicated, with no order as to costs.

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