The Allahabad High Court held that the designated committee is not vested with discretion to reject declaration filed on SVLDRS-1.
The petitioner, M/s Magma Industries Limited filed its declaration on SVLDRS-1, under the Scheme. It disclosed the amount of disputed duty payable under the Act at Rs. 47,56,751/- and the Estimate Amount Payable (EAP) Rs. 14,27,025.30/-.
The disputed duty payable or ‘tax dues’ disclosed was the sum of the alleged short-paid duty and the evaded duty. The Designated Committee did not dispute the computation of disputed duty payable and EAP disclosed by the petitioner yet instead of issuing a demand on SVLDRS-3 it issued a demand on SVLDRS-2, to the petitioner. It also computed the EAP at Rs. 14,27,025.30. It included the amount of Rs.2,18,516/- already paid by the petitioner, during the investigation.
The division bench of Justice Naheed Ara Moonis and Justice Saumitra Dayal Singh concluded that the ‘tax dues’ of the petitioner stood ‘quantified’ for the purpose of Section 121(r), 123(c), 124(1)(d) and 125(1)(d) before the cut-off date 30.06.2019 at Rs. 45,38,231 and even if it may have been otherwise permissible to interpret those provisions in a manner that in the case of a pending enquiry, investigation or audit, no declaration may be filed unless the revenue authority had first communicated in writing the ‘quantified’ amount of ‘tax dues’/duty demand proposed under the Act, yet, that interpretation would stand blocked, at the instance of the revenue authorities, by virtue of the binding interpretation of the law offered by the CBIC, under section 133 of the Scheme.
The court held that the reasoning given by the Designated Committee in the impugned order runs contrary to law. The Designated Committee was obligated to deal with the declaration filed by the petitioner, on merits. No discretion was vested in the Designated Committee to take a different view. Even though the Circular has not been referred to or dealt by the Designated Committee, by virtue of the clear language of Section 133 of the Scheme, it was further obligated to necessarily act in accordance with that law.
The court while quashing the impugned order remitted the matter back to the Designated Committee to issue the necessary SVLDRS-3 within a period of thirty days from today. Petitioner shall have thirty days therefrom to deposit that amount and obtain a Discharge Certificate, in accordance with law.
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