Prior notice is required for enhanced tax-dues revision under the Sabka Vishwas Scheme, but statutory computation controls.
Under the Sabka Vishwas Scheme, a revision that enhances tax dues is not a mere clerical or arithmetical correction and requires prior notice and hearing; the revised quantification was therefore procedurally vulnerable. However, the petitioner's month-wise basis of computation was rejected because service tax returns were filed half-yearly and the Scheme's statutory formula, linked to the return filed under the relevant indirect tax enactment, governed the calculation. The writ petitions were treated as maintainable in light of the timely declarations and COVID-19 related extensions, but the substantive challenge failed except on the notice point.
Issues: (i) Whether the writ petitions challenging the revised declarations under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 were maintainable despite the scheme timelines and the COVID-19 related extensions. (ii) Whether the revised quantification of tax dues under the Scheme could be made without prior notice and hearing, and whether the petitioner's month-wise computation of liability was legally sustainable.
Issue (i): Whether the writ petitions challenging the revised declarations under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 were maintainable despite the scheme timelines and the COVID-19 related extensions.
Analysis: The declarations had been filed in time and the Scheme timelines stood affected by the pandemic and the consequent extensions for payment. In these circumstances, the challenge to the revised declarations was treated as capable of being entertained rather than being rejected on the ground of delay or lapse of the scheme period.
Conclusion: The writ petitions were held maintainable.
Issue (ii): Whether the revised quantification of tax dues under the Scheme could be made without prior notice and hearing, and whether the petitioner's month-wise computation of liability was legally sustainable.
Analysis: The Scheme computed tax dues with reference to the return filed under the relevant indirect tax enactment, and the applicable slab under Section 124(1)(c) of the Finance (No. 2) Act, 2019 governed the calculation. The Court held that the enhanced quantification was not a mere arithmetical or clerical correction within Section 128, but a revision affecting the tax dues under Section 127, for which prior notice was required. At the same time, the petitioner's month-wise basis of computation was rejected because service tax returns under the Finance Act, 1994 were filed half-yearly and the statutory formula under the Scheme prevailed.
Conclusion: Prior notice was required for the revised quantification, but the petitioner's computation was rejected and the challenge on merits failed.
Final Conclusion: The challenge succeeded only on the procedural point of notice, but the substantive interpretation of the Scheme and the revised computation were upheld against the petitioner, leading to dismissal of the writ petitions with limited liberty to seek time from the authorities.
Ratio Decidendi: Under the Scheme, a revision that enhances tax dues is not a mere clerical or arithmetical correction and requires notice and hearing, but the computation of tax dues must follow the statutory formula tied to the return filed under the relevant indirect tax enactment.