The Delhi High Court held that the Circular issued by the respondents dated 25.09.2019 (Annexure P-1 to the Judgement) prima facie is not violative of the provisions of the Sabka Vishwas scheme (Legacy Dispute Resolution) 2019 nor of the relevant Act.
The Judgment was rendered in a Public Interest Litigation filed by Nidhi Gupta against Union of India and Anr. The ruling was pronounced by a division bench consisting of Chief Justice Dhirubhai Naranbhai Patel and Justice C.Hari Shankar.
The Petitioner, Nidhi Gupta, challenged the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 through a Public Interest Litigation. The Petitioner challenged the Rule 3 of the Scheme, 2019. The rule mandates that the declaration under section 125 shall be made electronically at https://cbic-gst.gov.in in Form SVLDRS-1 by the declarant, on or before the 31st December, 2019. The rule also mandates that a separate declaration shall be filed for each case. The Explanation to the subsection 2 identifies four cases that can be covered under the Scheme — (a) a show-cause notice or one or more appeal arising out of such notice which is pending as on the 30th day of June, 2019; or (b) an amount in arrears; or (c) an enquiry or investigation or audit where the amount is quantified on or before the 30th day of June, 2019; or (d) a voluntary disclosure.
The petitioner contended that the cut-off date of 30.06.2019 is not being maintained by the respondents and that the respondents are settling the cases in which notices are issued after 30.06.2019 and the demands are quantified after 30.06.2019. Pointing to Section 121(c) of The Finance Act, 2013, which deals with definition of “amount in arrears”, the court, however, did not agree with this contention.
The petitioner has also challenged para nos. vii & viii of the Circular dated 25.09.2019, issued by the respondents claiming that the same is in violation of the Scheme, 2019 and the respondents are settling the cases beyond the Scheme. The clause VII excludes cases which are under appeal and where final hearing has taken place on or before 30th June, 2019 and cases under adjudication. However such cases would still fall under the arrears category once the appellate or adjudication order, is passed and has attained finality or appeal period is over, and other requirements under the Scheme are fulfilled according to the Circular. Clause VIII further explains “an amount in arrears” as the amount of duty which is recoverable on account of no appeal having been filed by the declarant against an order or order-in-appeal before the expiry of the period of time for filing of an appeal or the order-in-appeal having attained finality. The situations wherein the taxpayer does not want to file an appeal even though the time period for filing of an appeal is not over, the taxpayer can file a declaration under the Scheme provided he gives in writing to the department that he will not file an appeal.
The Court answering the question in negative clarified that “by no stretch of imagination it can be said that paragraph Nos .vii and viii of the Circular dated 25.09.2019 is said to be in violation of the sabka Vishwas Scheme, 2019. Even if the demand is quantified and no appeal is preferred or even if the appeal is preferred but the assessee is applying under the aforesaid Scheme, 2019, it will mean to be covered by Clause 3(b)”.
The court further concluded that the cut-off date of 30.06.2019 is applicable only in the eventualities which are covered under Rules 3(a) [a show-cause notice, or one or more appeal arising out of such notice which is pending as on the 30th day of June, 2019] and 3(c) [an enquiry or investigation or audit where the amount is quantified on or before the 30th day of June, 2019]. However, the cut-off date of 30.06.2019 is not applicable for the cases which are covered under Rules 3(b) [an amount in arrears] & 3(c).
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