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Issues: Whether the Department was justified in treating the declarations under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 as voluntary disclosures on the footing that the declarations contained factually incorrect particulars regarding filing of returns, and whether the rectification orders could be interfered with on the grounds of limitation and breach of procedure or natural justice.
Analysis: The declarations stated that returns had been filed for the relevant periods, but the material placed before the Court showed that no returns had been uploaded and the statements in the declarations were factually incorrect in a material particular. On that basis, Section 129(2)(c) of the Finance Act, 2019 enabled the Department to treat the declarations as never made and to proceed for recovery under the service tax law. The Department, however, did not deny the benefit of the Scheme altogether and instead changed the category of the declarations to voluntary disclosure, with the consequence that only the waiver components under the Scheme would remain available and the tax dues declared would still have to be paid under Section 124(1)(e) of the Finance Act, 2019. Even if the rectification orders suffered from procedural objections, interference was not warranted because the appellant was not prejudiced in substance and the Department had adopted the less onerous course open to it in law. The Court also held that amnesty provisions are to be construed strictly in favour of the Department.
Conclusion: The rectification orders were sustained and the challenge to the change in category failed; the appellant was not entitled to complete relief under the Scheme, though credit and payment adjustments were directed for the relevant periods.
Ratio Decidendi: Where a declaration under an amnesty scheme contains a material falsehood, the authority may treat it as never made or, if it adopts a lesser course, alter the category of relief without interference if the ultimate statutory justice is not disturbed.
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