Sabka Vishwas scheme benefits cannot be denied on mistaken co-noticee liability where liabilities are separately attributable.

A declarant under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 cannot be denied scheme benefits as a co-noticee where the show cause notice segregates liabilities and does not impose joint and several liability for another entity's demand. The Gujarat HC held that liability must be examined on the basis actually attributable to the declarant, especially where the declarant's firm came into existence after the relevant period for the earlier firm's demand. Applying a liberal and pragmatic construction consistent with the scheme's object, the Court quashed the rejection and remitted the declaration for fresh consideration in accordance with law.

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Issues: (i) Whether the declarant could be treated as a co-noticee and denied benefit under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 on the footing that the main noticee had not discharged the duty demand; (ii) Whether the rejection of the declaration was sustainable when the show cause notice and the scheme provisions required the declaration to be examined on the basis of the liability actually attributable to the declarant.

Issue (i): Whether the declarant could be treated as a co-noticee and denied benefit under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 on the footing that the main noticee had not discharged the duty demand.

Analysis: The show cause notice segregated the liabilities of the different entities and did not allege joint and several liability against the writ applicant for the demand raised on the earlier firm. The declarant's firm had come into existence after the period for which the earlier firm's liability was alleged, and therefore the writ applicant could not be fastened with that earlier liability. The scheme provisions dealing with tax dues and eligibility, read with the clarification on co-noticees, did not permit the respondent to treat the writ applicant as a co-noticee for a demand that was separately attributable to another entity.

Conclusion: The writ applicant could not be treated as a co-noticee for the earlier firm's demand, and the rejection on that basis was unsustainable.

Issue (ii): Whether the rejection of the declaration was sustainable when the show cause notice and the scheme provisions required the declaration to be examined on the basis of the liability actually attributable to the declarant.

Analysis: The scheme was intended to resolve legacy disputes and had to be applied with a liberal, reasonable, and pragmatic approach consistent with natural justice. Since the impugned decision proceeded on an erroneous premise and failed to treat the declaration according to the actual liability of the writ applicant, the matter required fresh consideration. The Court therefore set aside the committee's decision and remitted the declaration for reconsideration in accordance with law.

Conclusion: The rejection could not be sustained, and the declaration had to be reconsidered afresh.

Final Conclusion: The writ petition succeeded to the extent that the impugned rejection was quashed and the declaration was directed to be reconsidered afresh by the designated committee.

Ratio Decidendi: A declarant cannot be denied statutory scheme benefits on the mistaken assumption of co-noticee liability where the show cause notice segregates liabilities and does not impose joint and several liability for another entity's demand; such declarations must be decided fairly and in a manner consistent with the object of the scheme.

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