Sabka Vishwas penalty relief extends to co-noticees even without a separate declaration when the main dispute is settled.

Personal penalties on co-noticees were treated as eligible for relief under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, where the main noticee's duty and penalty liability had already been settled. Section 124 of the Finance Act, 2019 was read as extending to penalty and late-fee matters, and the declaration requirement under Section 125 and Rule 3 was treated as procedural when only penalty was in issue. The absence of a separate declaration by the co-noticees was not held to defeat the Scheme benefit, because the substantive entitlement to penalty relief had already arisen. The personal penalties were therefore held not to survive.

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Issues: Whether personal penalties imposed on co-noticees survive when the main noticee's duty and penalty liability has been settled under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, and whether failure to file a separate declaration defeats the benefit of the Scheme.

Analysis: The relief under Section 124 of the Finance Act, 2019 extends to penalty or late fee cases and is not dependent on the same adjudicatory process applicable to duty disputes. Section 125 of the Finance Act, 2019 and Rule 3 of the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019 contemplate declarations, but the filing requirement is treated as procedural where only penalty is in issue and the main dispute has already been settled. The benefit of the Scheme was held not to be denied merely because a separate declaration was not filed by the co-noticees, since the substantive entitlement to penalty relief had already arisen.

Conclusion: The personal penalties did not survive and the appeals were allowed in favour of the assessees.

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