Case Note & Summary
The petitioner, Eureka Fabricators Pvt. Ltd., a manufacturing unit holding central excise registration, was issued a show cause-cum-demand notice dated 04.10.2017 demanding central excise duty on clearances of pressure vessels. The petitioner contested the notice. Meanwhile, the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) was introduced. The petitioner filed a declaration under the scheme on 20.09.2019. Subsequently, the adjudicating authority passed a final assessment order on 31.12.2019 quantifying the duty demand. The Designated Committee, by order dated 11.09.2020, rejected the petitioner's declaration on the ground that the tax dues were quantified in the show cause notice and not in the final assessment order. The petitioner challenged this rejection by filing a writ petition under Article 226 of the Constitution of India. The High Court examined the provisions of the SVLDRS and noted that the scheme defines 'tax dues' in relation to a show cause notice as the amount of duty payable after the final assessment order. Since the final assessment order was passed before the declaration was processed, the committee could not ignore it. The court held that the committee's action was arbitrary and contrary to the scheme. The court quashed the order dated 11.09.2020 and directed the respondents to process the declaration and settle it in accordance with the scheme, granting consequential relief including refund of Rs.45,60,438. The court also allowed the connected writ petition filed by the director of the company.
Headnote
A) Central Excise - Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Declaration - Tax Dues - The Designated Committee rejected the petitioner's declaration under the SVLDRS on the ground that the tax dues were quantified in the show cause notice and not in the final assessment order. The High Court held that the final assessment order dated 31.12.2019 quantified the duty demand and the committee could not reopen it. The court directed the respondents to process the declaration and settle it in accordance with the scheme, granting consequential relief including refund of Rs.45,60,438. (Paras 3-20) B) Constitutional Law - Article 226 - Writ Jurisdiction - The High Court exercised its writ jurisdiction to quash the order of the Designated Committee dated 11.09.2020 and directed the respondents to settle the declaration filed under the SVLDRS. The court held that the committee's action was arbitrary and contrary to the scheme. (Paras 3-20)
Issue of Consideration
Whether the Designated Committee under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 can reject a declaration on the ground that the tax dues are quantified in the show cause notice and not in the final assessment order, and whether the committee can reopen a final assessment order.
Final Decision
Writ petitions allowed. Order dated 11.09.2020 passed by Designated Committee quashed. Respondents directed to process and settle the declaration dated 20.09.2019 in accordance with Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 and grant consequential relief including refund of Rs.45,60,438.
Law Points
- Sabka Vishwas (Legacy Dispute Resolution) Scheme
- 2019
- Designated Committee
- Final Assessment Order
- Show Cause Notice
- Tax Dues
- Central Excise Act
- 1944
- Article 226
- Writ Jurisdiction
