High Court rules rejection under SVLDR Scheme illegal, directs fresh decision.

The High Court held that the rejection of the petitioner's application under the SVLDR Scheme due to audit initiation post the cut-off date was illegal and unjustified. Relying on previous court judgments, the court emphasized the scheme's objective and reasonable interpretation of its provisions. The court quashed the rejection order, directing a fresh decision on the petitioner's declaration forms within a specified timeline, ensuring a fair hearing. Additionally, the court empowered the respondents to act on false particulars post-issuance of a discharge certificate. The writ petition was allowed, securing the petitioner's right to benefit from the SVLDR Scheme.

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Issues:
1. Rejection of application under the SVLDR Scheme based on the initiation of an audit.
2. Dispute regarding the timeline of audit initiation and application filing under the SVLDR Scheme.
3. Interpretation of relevant provisions of the SVLDR Scheme in light of previous court judgments.
4. Legality and justification of denying the petitioner the benefit of the SVLDR Scheme.

Analysis:
1. The petitioner, a GST-registered proprietorship firm, applied under the SVLDR Scheme for voluntary disclosure and deposited the due service tax. However, the application was rejected citing the initiation of an audit after the cut-off date of 30.06.2019, which allegedly made the petitioner ineligible for the scheme.

2. The petitioner's counsel argued that the audit notice was issued after the cut-off date and should not preclude the petitioner from benefiting from the SVLDR Scheme. The respondent's representative acknowledged the timeline discrepancy but contended that the audit initiation notice was served before the application date, hence disqualifying the petitioner.

3. Referring to a judgment by the Bombay High Court, the Rajasthan High Court emphasized that an audit, investigation, or enquiry initiated post 30.06.2019 should not bar a party from voluntary disclosure under the SVLDR Scheme. The court highlighted the importance of the scheme's objective and the need for a reasonable interpretation of its provisions.

4. The High Court concluded that the respondents' action in initiating an enquiry and rejecting the petitioner's application under the SVLDR Scheme was illegal and unjustified. Consequently, the court quashed the impugned order and directed the restoration of the petitioner's declaration forms for a fresh decision, emphasizing the need for a fair hearing and adherence to the law within a specified timeline.

5. The court also empowered the respondents to take action if false particulars were found in the petitioner's declaration after the issuance of a discharge certificate. The writ petition was allowed, and the stay application was disposed of, ensuring the petitioner's right to avail benefits under the SVLDR Scheme and receive a fair decision within the legal framework.

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