Voluntary disclosure under Sabka Vishwas Scheme cannot be rejected for a post-30.06.2019 enquiry; hearing is mandatory before adverse rejection.

Under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, the bar on voluntary disclosure was confined to cases where enquiry, investigation or audit had already commenced on or before 30.06.2019; a post-30.06.2019 enquiry could not, by itself, render the declarant ineligible. The summary rejection of the declaration was also unsustainable because adverse rejection under the Scheme attracts civil consequences and must comply with natural justice. The Bombay High Court therefore quashed the rejection and directed fresh consideration of the declaration after hearing the declarant and passing a speaking order in accordance with law.

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Issues: (i) Whether a declaration under the voluntary disclosure category of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 could be rejected on the ground that an enquiry had been initiated after 30.06.2019 but before the declaration was filed. (ii) Whether the summary rejection of the declaration without affording an opportunity of hearing was sustainable.

Issue (i): Whether a declaration under the voluntary disclosure category of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 could be rejected on the ground that an enquiry had been initiated after 30.06.2019 but before the declaration was filed.

Analysis: The scheme treated enquiry, investigation and audit as relevant only in relation to the pre-30.06.2019 legacy dispute window. Reading the relevant provisions harmoniously, the scheme repeatedly attached significance to 30.06.2019 for pending enquiries and quantified dues. Clause (f) of section 125(1), though not expressly repeating that date, had to be construed consistently with clauses (c) and (e) so that the bar on voluntary disclosure applied only where the declarant had already been subjected to enquiry, investigation or audit on or before 30.06.2019. A post-30.06.2019 enquiry could not, by itself, defeat eligibility.

Conclusion: The rejection on the ground of ineligibility was held to be unsustainable and was set aside.

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

Analysis: Rejection of a declaration under the scheme carries adverse civil consequences. In a scheme intended to provide legacy dispute resolution, an outright rejection without giving the declarant an opportunity to explain or clarify the basis of eligibility was contrary to the principles of natural justice. The Committee was required to hear the declarant before passing an adverse order.

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

Final Conclusion: The impugned rejection was quashed and the matter was sent back for fresh consideration of the declaration after hearing the declarant and passing a speaking order in accordance with law.

Ratio Decidendi: Under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, the bar against voluntary disclosure after enquiry, investigation or audit applies only where such proceedings had commenced on or before 30.06.2019, and adverse rejection of a declaration must comply with natural justice.

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