Case Note & Summary
The petitioner, P. N. Gadgil & Sons Ltd., a manufacturer and seller of gold/silver articles and jewellery registered under the Central Excise Act, filed a writ petition under Article 226 of the Constitution of India challenging the rejection of its declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS). The petitioner had been intimated on 10 July 2018 about an internal audit of its accounts for the period April 2013 to June 2017. Subsequently, on 27 May 2019, the petitioner filed a declaration under the SVLDRS Scheme. The Designated Committee rejected the declaration on the ground that an audit was pending against the petitioner. The petitioner contended that the Scheme does not disqualify an applicant merely because an audit is pending, and that the rejection was passed without affording any opportunity of hearing. The respondents argued that the Scheme requires a pending enquiry or investigation, and audit is a form of enquiry. The court held that the SVLDRS Scheme is a beneficial legislation aimed at resolving legacy disputes and must be interpreted liberally. The court found that the rejection was arbitrary and violated principles of natural justice as no hearing was given. The court quashed the rejection and directed the Designated Committee to pass a fresh reasoned order after affording the petitioner an opportunity of hearing. The court also observed that the Scheme does not bar applicants with pending audits, and the Designated Committee must consider the eligibility afresh.
Headnote
A) Constitutional Law - Article 226 - Writ of Certiorari - Rejection of SVLDRS Form 1 without hearing violates principles of natural justice - Held that the Designated Committee must pass a reasoned order after affording an opportunity of hearing (Paras 1-2). B) Indirect Tax - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Section 124 - Eligibility - Pending audit does not disqualify an applicant under the Scheme - Held that the Scheme is a beneficial legislation and must be interpreted liberally to achieve its object of dispute resolution (Paras 3-5).
Issue of Consideration
Whether the rejection of the petitioner's declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) on the ground that an audit was pending was valid, and whether the petitioner was entitled to an opportunity of hearing before such rejection.
Final Decision
The court allowed the writ petition, quashed the rejection of SVLDRS Form 1, and directed the Designated Committee to pass a fresh reasoned order after affording the petitioner an opportunity of hearing.
Law Points
- Natural justice
- opportunity of hearing
- SVLDRS Scheme eligibility
- pending audit not a bar
- Section 124 of Finance Act
- 2019
