Court Orders Processing of Declaration Under DTVSV Act 2020, Emphasizes Beneficial Interpretation

The Writ Petition was allowed, setting aside the 3rd respondent's order rejecting the petitioner's declaration under the DTVSV Act 2020. The Court directed the 3rd respondent to process the petitioner's declaration in Forms 1 and 2, issue Form 3, and accept the payment declared. Emphasizing the beneficial nature of the Act, the Court held that the Act should be interpreted liberally to resolve tax disputes and unlock revenues. No costs were awarded, and pending miscellaneous petitions were closed.

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Issues Involved:
1. Validity of Circular No. 21 of 2020.
2. Rejection of petitioner’s declaration/application under the Direct Tax Vivad Se Vishwas Act, 2020 (DTVSV Act 2020).
3. Interpretation and application of the DTVSV Act 2020 and related circulars.

Issue-wise Detailed Analysis:

1. Validity of Circular No. 21 of 2020:
The petitioner challenged Circular No. 21 of 2020, dated 04.12.2020, issued by the 2nd respondent, arguing that it was null, void, and unconstitutional concerning the clarification issued regarding Question No. 59. The petitioner contended that the circular’s restriction, which limited the benefit to appeals filed on or before 04.12.2020, was contrary to the DTVSV Act 2020. The Court referred to a previous decision in Boddu Ramesh v/s. Designated Authority, where it was held that the restriction imposed by the circular had no significance and what mattered was the "pendency of the appeal" with an application for condonation of delay and the appeal being admitted by the appellate authority before the date of filing of the declaration.

2. Rejection of Petitioner’s Declaration/Application:
The petitioner’s declaration/application in Forms 1 and 2 filed on 05.03.2021 under the DTVSV Act 2020 was rejected by the 3rd respondent on 20.04.2021. The rejection was based on the remark that no appeal was pending as of the specified date (31.01.2020) and that the condonation application was not filed before the issuance of Circular No. 21 of 2020. The Court noted that the petitioner had filed an appeal before the Tribunal on 23.02.2021, which was admitted, and the delay was condoned on 22.03.2021. The Court concluded that the declaration filed by the petitioner on 05.03.2021 should be considered valid as it was filed before the extended last date of 31.03.2021.

3. Interpretation and Application of the DTVSV Act 2020 and Related Circulars:
The Court emphasized the beneficial nature of the DTVSV Act 2020 and stated that its interpretation should be liberal to achieve the intended objective. It cited the Economic Survey 2017-18, highlighting the extensive pendency and low success rate of tax department appeals, underscoring the need for schemes like DTVSV to unlock revenues. The Court held that the rejection of the petitioner’s declaration based on Circular No. 21 of 2020 was unsustainable. The Court directed the 3rd respondent to accept the petitioner’s declaration in Forms 1 and 2, process it according to the DTVSV Act 2020, issue Form 3, and accept the payment declared in Form 1.

Conclusion:
The Writ Petition was allowed, and the impugned order of the 3rd respondent was set aside. The 3rd respondent was directed to process the petitioner’s declaration in accordance with the DTVSV Act 2020. The Court reiterated that the DTVSV Act 2020 should be interpreted liberally to fulfill its purpose of resolving tax disputes and unlocking revenues. Pending miscellaneous petitions were closed, and no order as to costs was issued.

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