Excluding Taxpayers from the SVLDR Scheme due to obvious errors is contrary to its object: Delhi HC quashes Order Rejecting SVLDR Declaration [Read Order]

Quashing the order rejecting Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme) Declaration the Delhi High Court remarked that excluding taxpayers from Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR) scheme due to obvious errors is contrary to its object.

The petitioner has filed the present petition under Article 226 of the Constitution of India impugning the decision of the concerned authority to reject the petitioner’s application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme).

The petitioner, Carpet Export Promotion Council, had filed the said application online in the prescribed format – Form SVLDRS-I. The said application was rejected and the ground for rejection along with the remarks was communicated online. The petitioner’s application was rejected on the ground of “ineligibility” with the remarks, “incomplete and selective declaration”.

According to the respondents the petitioner had wrongly availed of cess in TRAN-I and had reversed the amount, but the interest and along with the penalty were recoverable from the petitioner. The petitioner had deposited the service tax, which was found due on ST-3 reconciliation, but had not deposited the interest and penalty.

The Designated Authority also pointed out that the petitioner had wrongly availed of the Cenvat Credit on services relating to the rent of a cab, medical insurance, and hotel accommodation, which was deposited by the petitioner but the interest and penalty remained outstanding and had wrongfully availed of the Cenvat Credit on exempted income under Rule 6(3) of the Cenvat Credit Rules, 2004.

The petitioner submitted under the SVLDR Scheme covered the liabilities, but the amount shown by the petitioner under columns relating to duty details and pre-deposit of duties was erroneously reflected. According to the department, the amount of duty mentioned in the petitioner's application ought to have included an amount on account of wrongful availment of the cess.

A Division Bench of the Delhi High Court comprising Justice Vibhu Bakhru and Justice Amit Mahajan observed that “The nature of the SVLDR Scheme, the same is required to be interpreted liberally to further its object. In the aforesaid perspective, excluding a taxpayer merely because there were some obvious and not material errors in the quantum of the duty details filled in the form, although the correct amount of duty was deposited, would run contrary to the object of the SVLDR Scheme.”

“The impugned order rejecting the petitioner’s declaration under the SVLDR Scheme is set aside and the designated authority is directed to process the petitioner’s declaration in accordance with the SVLDR Scheme as expeditiously as possible, and preferably within a period of eight weeks from today” the Bench ordered.

To Read the full text of the Order CLICK HERE

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