Petitioner eligible for Sabka Vishwas Scheme despite pending penalty show cause notice on cut-off date

Gujarat HC allowed petitioner's writ petition challenging rejection of SVLDRS-1 form under Sabka Vishwas Scheme 2019. Revenue authorities rejected declaration claiming petitioner ineligible as penalty amount of Rs. 20,72,31,044 in show cause notice lacked quantification. HC held petitioner eligible since show cause notice for penalty was pending adjudication on cut-off date 30.06.2019. Scheme applies to penalty show cause notices regardless of adjudication status. Impugned rejection order quashed, matter remanded to authorities for fresh adjudication per law.

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Issues:
Challenge to rejection of declaration under SVLDRS-1 by respondent due to lack of quantification of penalty amount in show cause notice.

Analysis:
The petitioner challenged the rejection of their declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) by the respondent, contending that they were eligible as the show cause notice proposed a penalty amount. The respondent rejected the declaration on the basis that the penalty amount was not quantified in the notice, rendering the declaration void.

The respondent issued a show cause notice proposing a penalty under the Cenvat Credit Rules, 2004. When the SVLDRS was introduced, the petitioner filed a declaration under the Scheme. The respondent informed the petitioner that the declaration was void due to the lack of quantification of penalty in the show cause notice.

The Designated Committee rejected the petitioner's declaration without a proper hearing. The petitioner requested an adjournment for a personal hearing, which was denied. Subsequently, the petitioner's declaration was rejected, and their request for a personal hearing was also declined.

The petitioner argued that they were eligible under the SVLDRS as the show cause notice quantified the penalty amount. They referred to the Scheme's provisions and FAQs to support their eligibility claim. The respondent, however, contended that the declaration was incorrect as the penalty amount was declared in the declaration but not yet adjudicated upon.

The Court found that the show cause notice was pending adjudication when the SVLDRS was introduced, making the petitioner eligible under the Scheme. The Court held that the scheme applied to any show cause notice for penalty/late fee, regardless of adjudication status. The rejection of the petitioner's declaration was quashed, and the matter was remanded back to the authorities for adjudication in accordance with the law.

The Court directed the authorities to issue Form SVLDRS-4 within 12 weeks. The petition was allowed, and no costs were awarded.

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