Court upholds rejection of petitioner's Sabka Vishwas Scheme application due to unquantified tax dues

The court dismissed the petitioner's challenge to the rejection of their application under the Sabka Vishwas Scheme, 2019. The rejection was upheld as the petitioner's tax dues were not quantified by the specified date, rendering them ineligible for the scheme due to ongoing investigations and an impending show cause notice. The court found the rejection justified under Section 125(1)(e) of the Act, leading to the dismissal of the writ petition for lack of merit. The impugned communication was upheld, and connected miscellaneous petitions were closed without costs.

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Issues:
Challenge to rejection of application under Sabka Vishwas Scheme

Analysis:
The petitioner challenged the communication rejecting their declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The rejection was based on the grounds that tax dues were not quantified by the specified date of 30.06.2019. The petitioner argued that the rejection was improper and deprived them of their right to settle the dispute under the scheme. They had filed two declarations under different categories, but both were rejected without a personal hearing. The respondents contended that the petitioner was not eligible for the scheme as investigations were ongoing, and a show cause notice had been issued regarding service tax evasion.

The court considered the arguments presented by both parties and examined the provisions of the Sabka Vishwas Scheme, 2019. The scheme aimed to resolve legacy disputes and free taxpayers from litigation burdens. It applied to declarants who had not paid tax under specified enactments, including the Finance Act, 1994. The definition of "tax dues" under the scheme encompassed various scenarios, such as pending appeals, show cause notices, investigations, voluntary disclosures, and arrears. Exclusions from filing declarations were outlined in Section 125 of the Act, including situations where appeals had been finalized, convictions made, show cause notices issued, or investigations pending without quantification before the cutoff date.

The court noted that despite the petitioner's timely filing of declarations, their case was under investigation, and a show cause notice was imminent. As per Section 125(1)(e) of the Act, individuals under investigation without quantified duty amounts by the specified date were ineligible for the scheme. Therefore, the rejection of the petitioner's application was deemed appropriate, and the writ petition was dismissed for lacking merit. The court found no grounds for interference with the impugned communication and ordered the closure of connected miscellaneous petitions without costs.

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