Sabka Vishwas Scheme disqualification requires proof of pending enquiry or investigation and valid service of notices before rejecting a declaration.

Under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, the enquiry or investigation bar could not be applied unless the department showed by material evidence that disqualifying proceedings had actually been initiated and served when the declaration was filed. As no reliable proof of service or dispatch was produced and the rejection orders were unreasoned, the petitioner was not validly disqualified from the Scheme. In the absence of proof of a pending investigation at the relevant time, the declaration of tax liability was directed to be accepted, and the show cause notice was conditionally quashed on deposit of the declared amount within the stipulated period, with revival if deposit was not made.

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Issues: (i) Whether the petitioner was validly disqualified from availing the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 on the ground that an enquiry or investigation had already commenced. (ii) Whether the declaration of tax liability was liable to be accepted and the impugned show cause notice quashed.

Issue (i): Whether the petitioner was validly disqualified from availing the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 on the ground that an enquiry or investigation had already commenced.

Analysis: The disqualification under Clause 125(1)(e) and Clause 125(1)(f) of the Scheme depended on the existence of a pending enquiry or investigation and, in the case of voluntary disclosure, on the bar created after such enquiry or investigation. The record did not show proof that the relevant notices had been served on the petitioner when the declaration was filed. The departmental stand also showed no reliable proof of dispatch or service. The earlier rejection orders were unreasoned and did not establish that the statutory bar had in fact arisen.

Conclusion: The petitioner was not shown to have been validly disqualified under the Scheme.

Issue (ii): Whether the declaration of tax liability was liable to be accepted and the impugned show cause notice quashed.

Analysis: In the absence of proof of a pending investigation at the relevant time, and in view of the deficient rejection of the declaration, relief was warranted. Since the Scheme was no longer operational, the declaration could not be processed in the ordinary course. The Court therefore directed acceptance of the declared liability and protected the assessee by quashing the show cause notice upon deposit of the declared amount within the stipulated period, with revival of the notice if the amount was not deposited.

Conclusion: The declaration was directed to be accepted and the show cause notice was conditionally quashed.

Final Conclusion: The writ petition succeeded in substance to the extent of granting relief against the Scheme rejection and affording conditional protection from the show cause proceedings, with the matter finally disposed of in the terms directed.

Ratio Decidendi: A person cannot be denied the benefit of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 under the enquiry or investigation bar unless the department establishes, by material evidence, that the statutory disqualifying proceedings had actually been initiated and served at the relevant time; unreasoned rejection orders are insufficient.

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