SVLDRS declaration for admitted duty liability during inquiry: "tax dues quantified" u/s125(1)(e); rejection quashed

Rejection of a declaration under SVLDRS on the ground that "tax dues" were not quantified on or before 30.06.2019 was held unsustainable. Interpreting s.125(1)(e) with the departmental circular dated 27.08.2019, the HC held that "quantified" includes written communication of duty liability admitted during inquiry. The record showed the declarant's written admission on 21.05.2019, corroborated by subsequent departmental communications and later adjudication reflecting the same quantified figure; hence the department's view that quantification was absent before the cut-off date was misconceived. The impugned rejection was quashed; the authorities were directed to accept the SVLDRS-1 declaration and close the matter, including the consequential OIO.

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Issues Involved:
1. Amendment of the application.
2. Eligibility under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS).
3. Quantification of tax dues before the cut-off date.
4. Interpretation of relevant provisions and circulars.

Summary:

1. Amendment of the Application:

Having heard learned advocates for the parties, application for amendment is allowed. Necessary amendment be carried out forthwith.

2. Eligibility under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS):

By way of this petition, the petitioner has prayed to issue a writ in the nature of certiorari or mandamus calling for the records pertaining to the petitioner's case and also quash and set aside the order dated 05.05.2020 rejecting the declaration filed by the petitioner bearing Application Reference No LD0312190000359 dated 03.12.2019 vide letter dated 05.05.2020 and to direct respondent no. 2 to process the same on merits. The petitioner has further prayed to quash and set aside the impugned order dated 07.09.2020 rejecting the SVLDRS application filed by the petitioner and to direct respondent no. 2 to process the same on merits.

3. Quantification of Tax Dues Before the Cut-off Date:

It appears that by communication dated 05.05.2020, the declaration of the petitioner was rejected on the ground that the declared tax had not been quantified and communicated on or before 30.06.2019. The petitioner contended that the tax liabilities were quantified and communicated to the authorities on 21.05.2019 and this was supported by various communications and statements made during the inquiry. The court found that the perception of the department that there was no quantification before 30.06.2019 is clearly misconceived. The letter dated 21.05.2019 and subsequent communications indicated that the tax liabilities were indeed quantified before the cut-off date.

4. Interpretation of Relevant Provisions and Circulars:

The court referred to a circular of the Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes & Customs, particularly para 10(g), which clarified that a written communication intimating duty demand or duty liability admitted by the person during inquiry, investigation, or audit would be considered as quantification. The court also distinguished the decision in the case of Chaque Jour Hr. Services Pvt. Ltd. vs. Union of India & Ors. and relied on the decision of the Delhi High Court in the case of Seventh Plane Networks Pvt. Ltd. vs. Union of India & Ors., which advocated for a liberal interpretation of the SVLDRS, 2019.

Conclusion:

In view of the above, the impugned orders dated 05.05.2020 and 07.09.2020 are hereby quashed and set aside. The respondents are directed to accept the declaration filed by the petitioner on 03.12.2019 as per SVLRDS-1 and close the issue including the OIO dated 28.06.2023. Petition is accordingly allowed. Rule is made absolute accordingly. Direct service is permitted.

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