Court allows petitioner to benefit from SVLDRS-1 under Sabka Vishwas Scheme, rejects rejection, directs relief

The court held that the petitioner was eligible to file the SVLDRS-1 declaration and avail benefits under the Sabka Vishwas Scheme. It found that the tax dues were quantified before the cut-off date and invalidated the rejection of the declaration by the Designated Committee. Emphasizing adherence to the Scheme's objectives, the court set aside the rejection order, directing the respondents to grant relief to the petitioner. The petitioner was instructed to deposit the balance amount within eight weeks for issuance of a discharge certificate. The writ petition was allowed without costs.

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Issues Involved:
1. Eligibility of the petitioner to file SVLDRS-1 declaration.
2. Quantification of tax dues before the cut-off date.
3. Validity of the rejection of the SVLDRS-1 declaration by the Designated Committee.
4. Adherence to the principles and objectives of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019.

Issue-wise Detailed Analysis:

1. Eligibility of the petitioner to file SVLDRS-1 declaration:
The petitioner sought a writ of mandamus under Article 226 of the Constitution of India for the restoration and reconsideration of their SVLDRS declaration on merits. The petitioner had filed the SVLDRS-1 declaration on 1st November 2019, declaring tax dues of Rs. 72.37 lakhs as admitted by their Director. The petitioner consistently admitted this liability in various forms and communications. The court concluded that the petitioner was eligible to file the SVLDRS-1 declaration and to avail benefits under the said Scheme.

2. Quantification of tax dues before the cut-off date:
The Designated Committee rejected the SVLDRS-1 declaration on the grounds that the tax dues were not quantified finally on or before 30th June 2019. The court noted that the Director of the petitioner had admitted the tax liability of Rs. 72.37 lakhs in a statement recorded on 25th March 2019. The court referred to the definitions of 'tax dues' under Section 123(c) and 'quantified' under Section 121(r) of the Finance (No.2) Act, 2019, and concluded that the petitioner had satisfied these definitions. The court also referenced a recent judgment in Nabeel Construction Pvt. Ltd Vs. Union of India & Ors., which supported the petitioner's case.

3. Validity of the rejection of the SVLDRS-1 declaration by the Designated Committee:
The Designated Committee's order dated 12th February 2020 rejected the SVLDRS-1 declaration based on a verification report from the DGGI, which stated that the tax dues were not quantified by the cut-off date. The court found that this order was contrary to the forms SVLDRS-2 and SVLDRS-2A, which had quantified the tax dues at Rs. 72.37 lakhs. The court held that the reasons provided in the affidavit-in-reply, which were not part of the impugned order, could not be considered. The court concluded that the rejection of the SVLDRS-1 declaration was invalid.

4. Adherence to the principles and objectives of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019:
The court emphasized that the Scheme's objective was to liquidate outstanding litigation and free taxpayers from the burden of legacy taxes. The court referred to the Central Excise Circulars and Trade Notices, which supported the petitioner's case. The court reiterated the principles laid down in Nabeel Construction Pvt. Ltd., stating that the admission of tax dues before the cut-off date need not have mathematical precision. The court concluded that the impugned order was contrary to the objectives and intent of the Scheme.

Conclusion:
The court quashed and set aside the impugned order dated 12th February 2020, held the petitioner eligible to file the SVLDRS-1 declaration, and directed the respondents to pass a fresh order granting relief to the petitioner under the Scheme. The petitioner was directed to deposit the balance amount within eight weeks, and upon payment, the respondents were instructed to issue a discharge certificate within one week. The writ petition was allowed, and no order as to costs was made.

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