Petitioner's SVLDR Scheme application accepted despite rejection for late quantification under Section 121(r)

The Bombay HC allowed a petition challenging rejection of application under SVLDR Scheme, 2019. The petitioner's application was rejected as quantification of demand occurred after 30 June 2019. The court held that duty liability admitted by petitioner during investigation prior to the cutoff date of Rs.1,39,58,752 constituted "quantification" under Section 121(r) of the Scheme. Despite petitioner declaring a higher amount in the application as abundant caution, this could not deprive benefit of the scheme aimed at reducing litigation. The court directed respondents to accept the application and inform petitioner of any amount due within four weeks.

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Issues:
Challenge to rejection under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 based on quantification date eligibility.

Analysis:
The petitioner challenged the rejection of its application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, as the quantification of demand was post 30 June 2019, making the petitioner supposedly ineligible. The petitioner, registered under the Finance Act, 1994, admitted service tax liability for 2013-2018 during investigation. The SVLDR Scheme was introduced on 21 August 2019 with a cut-off date of 30 June 2019 for quantification. A show cause notice later demanded Rs.1,50,37,871 for 2014-2017. The petitioner applied under SVLDRS-1, mentioning Rs.1,50,37,871, but the application was rejected based on post-June 2019 quantification, leading to the petition challenging the rejection.

The petitioner contended that the quantification was done during the investigation before 30 June 2019, making them eligible for the Scheme. Even though the application stated a higher amount, it was out of caution and did not prejudice the respondents. The Ministry of Finance's clarification supported admission of duty liability before 30 June 2019. Section 125(1)(e) of the Scheme excludes cases where duty amount is unquantified post-June 2019, but the petitioner's admission pre-June 2019 made them eligible.

The court analyzed the Scheme's definition of "quantified" and the exclusion under Section 125(1)(e), emphasizing the importance of admission before the cut-off date. The court referred to a similar case where discrepancies in admitted tax dues were deemed immaterial for eligibility. Citing other judgments, the court found the rejection unjustified and quashed it. The respondents were directed to accept the petitioner's application and determine any payable amount within four weeks, with subsequent issuance of the final certificate upon payment. The petition was allowed without costs.

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