Binding clarificatory circular under Sabka Vishwas Scheme bars rejection of eligible declarations on an inconsistent ground.

A clarificatory circular under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 was treated as binding on the department, and declarations falling within its covered class could not be rejected on a ground inconsistent with that clarification. The petitioner's declaration was wrongly refused solely because the pending appeal was not filed pursuant to the show cause notice, even though the circular covered similarly situated assessees, including disputes relating to service tax on renting of immovable property. The rejection was set aside and the matter remitted for fresh consideration under the Scheme, subject to satisfaction of the remaining scheme conditions.

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Issues: Whether the petitioner was entitled to have its declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 considered in light of Circular No. 1073/06/2019-CX dated 29.10.2019, notwithstanding the reason assigned for rejection.

Analysis: The circular specifically clarifies that persons similarly situated, including members of the Retailers Association of India whose cases concern service tax on renting of immovable property and where the Supreme Court has permitted civil appeals subject to deposit of part of the dues, are entitled to file declarations under the Scheme and avail its benefits. The circular is treated as clarificatory and binding on the department. The rejection of the declaration solely on the ground that the pending appeal was not pursuant to the show cause notice was therefore unsustainable, though the petitioner must still satisfy the other requirements of the Scheme.

Conclusion: The petitioner is entitled to reconsideration of its declaration under the Scheme and the impugned rejection is set aside; the respondents cannot reject the declaration on the ground relied upon in the impugned order.

Final Conclusion: The matter is sent back for fresh consideration of the declaration in accordance with the Scheme and the binding circular, with compliance of the remaining scheme conditions left open.

Ratio Decidendi: A clarificatory circular issued under a settlement scheme is binding on the department and declarations cannot be rejected on a ground contrary to that clarification when the applicant otherwise falls within its covered class.

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