Petition Dismissed: Court Affirms Rejection Due to Lack of Valid Demand Notice, Citing Unjust Enrichment Principles.

The HC dismissed the petition, affirming the designated authority's rejection of the petitioner's declaration under the KVS Scheme due to the absence of a valid demand notice. The court held that the petitioner was not entitled to relief under writ jurisdiction, citing unjust enrichment principles. The petition was dismissed without costs.

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Issues Involved:
1. Whether the designated authority was justified in not considering the declaration filed by the petitioner under the KVS Scheme.
2. Whether the designated authority was justified in holding that the declaration filed by the petitioner falls under the exclusion of Section 95(ii)(b) of the Finance (No. 2) Act, 1998.
3. Whether the petitioner is entitled to any relief in the exercise of writ jurisdiction of this Court.

Detailed Analysis:

Issue 1: Justification for Not Considering the Declaration under KVS Scheme
The petitioner filed a writ petition in the Delhi High Court challenging the levy of additional duty of excise and seeking to quash certain notifications. The Delhi High Court dismissed the petition and directed the recovery of the disputed amount secured by bank guarantees. The petitioner then filed a declaration under the Kar Vivad Samadhan Scheme (KVS Scheme) to settle the tax arrears. The designated authority rejected the declaration, stating that no show cause notice or demand notice was issued to the petitioner, a requirement under the KVS Scheme.

The court found that the RT-12 assessments, which the petitioner claimed as notices of demand, were merely endorsements implementing the Delhi High Court's final order. These endorsements did not constitute a demand notice under the KVS Scheme. The court concluded that no tax arrears were pending against the petitioner as the disputed amounts were secured by bank guarantees and the assessments were based on values declared by the petitioner. Thus, the designated authority was justified in rejecting the declaration.

Issue 2: Exclusion under Section 95(ii)(b) of the Finance (No. 2) Act, 1998
Section 95(ii)(b) of the Finance Act excludes cases where no show cause notice or demand notice has been issued. The court examined the nature of the demand notice envisaged under the KVS Scheme and concluded that it must relate to a disputed amount pending before a competent authority. Since the RT-12 assessments were final and based on the petitioner's own declarations, they did not constitute a disputed demand. The court emphasized that the KVS Scheme aims to resolve pending disputes, not to reopen settled matters. Consequently, the court upheld the designated authority's decision that the petitioner's case fell under the exclusion clause of Section 95(ii)(b).

Issue 3: Entitlement to Relief in Exercise of Writ Jurisdiction
The court considered whether to exercise its writ jurisdiction to grant relief to the petitioner. It noted that the petitioner had already recovered the disputed duty from its customers, and allowing the petition would result in unjust enrichment. The court referenced the doctrine of unjust enrichment, which prevents a party from retaining undue benefits. The court also highlighted that the petitioner had engaged in extensive litigation, causing significant revenue loss to the government. Given these factors, the court declined to exercise its writ jurisdiction in favor of the petitioner and dismissed the petition.

Conclusion
The court dismissed the petition, holding that the designated authority was justified in rejecting the declaration under the KVS Scheme because no valid notice of demand was issued, and the petitioner was not entitled to relief under the writ jurisdiction due to the principles of unjust enrichment. The petition was dismissed with no order as to costs.

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