Tax declaration order set aside under Sabka Vishwas Scheme due to quantification interpretation. CBIC circulars binding.

The court set aside the order rejecting the declaration filed under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, finding that the tax dues were quantified before the cut-off date. It interpreted 'quantified' to include written communications of duty payable, not limited to those issued by Central Excise authorities. Emphasizing the binding nature of CBIC circulars, the court held that revenue authorities must adhere to them. The court's purposive construction of the Scheme aimed at resolving disputes favored the petitioner, directing the Designated Committee to issue the necessary certificate for settlement within thirty days.

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Issues Involved:
1. Challenge to the rejection of the declaration filed under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.
2. Determination of whether the 'tax dues' were 'quantified' before the cut-off date of 30.06.2019.
3. Interpretation of the term 'quantified' under the Scheme.
4. Binding nature of CBIC circulars on revenue authorities.
5. Purposive construction of the Scheme.

Issue-wise Analysis:

1. Challenge to the rejection of the declaration filed under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019:
The petitioner challenged the order dated 05.05.2020 by the Designated Committee rejecting its declaration on SVLDRS-1 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The rejection was based on the grounds that the tax liability was not 'quantified' before the cut-off date of 30.06.2019.

2. Determination of whether the 'tax dues' were 'quantified' before the cut-off date of 30.06.2019:
The court examined whether the 'tax dues' were 'quantified' before 30.06.2019. It was noted that the 'Panchnama' dated 10.02.2016 mentioned a duty short payment of Rs. 2,18,516/-, and a statement by the petitioner’s director on 13.05.2016 admitted duty avoidance of Rs. 45,38,231/-. The total amount was Rs. 47,56,751/-. The court found that these written communications satisfied the requirement of 'quantification' under Section 121(r) of the Scheme.

3. Interpretation of the term 'quantified' under the Scheme:
The term 'quantified' under Section 121(r) of the Scheme means a written communication of the amount of duty payable. The court interpreted that this does not necessarily need to be a communication issued by a Central Excise authority. The admissions made in writing by the petitioner during the investigation were deemed sufficient to meet this criterion.

4. Binding nature of CBIC circulars on revenue authorities:
The court emphasized that the CBIC Circular No. 1071/4/2019-CX.8 dated 27.8.2019 clarified that 'quantified' includes duty liability admitted by the person during enquiry, investigation, or audit. This circular is binding on revenue authorities as per Section 133 of the Scheme. The court cited Supreme Court precedents establishing that revenue authorities cannot deviate from CBIC circulars.

5. Purposive construction of the Scheme:
The court highlighted that the Scheme is a piece of reform legislation aimed at resolving legacy disputes and facilitating the transition to the GST regime. It requires a purposive construction to maximize settlements. The Designated Committee's rejection of the petitioner’s declaration was found to be contrary to the Scheme's purpose and the binding CBIC circular.

Conclusion:
The court set aside the impugned order dated 05.05.2020 and remitted the matter to the Designated Committee to issue the necessary SVLDRS-3 within thirty days. The petitioner was given thirty days thereafter to deposit the amount and obtain a Discharge Certificate. The petition was allowed with no orders as to costs.

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