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1. ISSUES PRESENTED AND CONSIDERED
(i) Whether, after issuance of a discharge certificate in Form SVLDRS-4 under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 for the relevant tax period, the Department can proceed with adjudication of a show cause notice and sustain a demand relating to the same tax period.
(ii) Whether, in the absence of the discharge certificate being revoked/cancelled by the competent authority under the Scheme, an adjudicating authority can effectively ignore the discharge certificate and continue proceedings on the premise that the declaration did not include the disputed demand.
2. ISSUE-WISE DETAILED ANALYSIS
Issue (i): Effect of SVLDRS discharge certificate on continuation of adjudication for the covered period
Legal framework (as discussed by the Court): The Court proceeded on the basis that a discharge certificate for "Full and Final Settlement of Tax Dues" was issued under section 127 of the Finance (No. 2) Act, 2019 read with Rule 9 of the Scheme, in Form SVLDRS-4, covering the period from Financial Year 2014-15 to Financial Year 2017-18 (up to June 2017).
Interpretation and reasoning: The Court identified the dispute as concerning adjudication of a show cause notice after issuance of the discharge certificate for the relevant tax period. The Court applied the principle that once the designated authority issues the discharge certificate, it is not open to proceed with adjudication for the same subject-matter during the covered period. The Court treated the matter as settled and squarely covered by the applied precedent, which the Court adopted as governing the outcome.
Conclusion: The impugned order sustaining further adjudication/demand for the covered tax period was held unsustainable and was set aside; the appeal was allowed with consequential relief as per law.
Issue (ii): Competence to revoke/cancel discharge certificate and permissibility of parallel adjudication without such revocation/cancellation
Legal framework (as discussed by the Court): The Court adopted the reasoning that the power to revoke or cancel a discharge certificate on the allegation of false particulars lies with the designated committee/authority constituted under the Scheme.
Interpretation and reasoning: The Court accepted the applied reasoning that allowing an adjudicating authority to proceed by disregarding a discharge certificate would (a) undermine the institutional/administrative hierarchy, and (b) risk conflicting/plurality of orders on the same subject. The Court treated revocation/cancellation by the designated committee as a necessary precondition; unless the discharge certificate is revoked/cancelled by the competent authority, adjudication cannot continue in a manner inconsistent with the discharge certificate.
Conclusion: In the absence of any revocation/cancellation of the discharge certificate by the designated committee, continuation of adjudication and sustaining a demand for the covered period was impermissible; accordingly, the impugned order was set aside.
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