Case Note & Summary
The petitioners, Morde Foods Pvt. Ltd. and its director, filed a writ petition under Article 226 of the Constitution of India challenging the rejection of their application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The petitioner company, engaged in manufacturing cocoa products, chocolates, and sugar confectionery, had been discharging excise duty on transactional value under section 4 of the Central Excise Act, 1944 for goods supplied to industrial/institutional consumers. In May 2014, an investigation was initiated by the Directorate General of Central Excise Intelligence alleging that goods supplied through distributors were not covered under exemption under rule 3 of the Legal Metrology Act, 2009. The petitioner had filed an appeal against a demand, which was pending before the Commissioner (Appeals) when they applied under the scheme under the 'litigation' category. The application was rejected on 13.01.2020 on the ground that the matter was not pending as 'litigation' but as 'arrears'. The petitioner then filed a subsequent application under 'arrears' category, which was also rejected on 30.01.2020. The court considered whether the rejection was valid. The court held that since an appeal was pending, the application should have been considered under 'litigation' category. The court quashed the rejection orders and directed the respondents to reconsider the petitioner's application under the 'litigation' category within four weeks. The court also directed that if the application is found to be in order, the respondents shall issue the requisite certificate under the scheme.
Headnote
A) Sabka Vishwas Scheme - Classification of Application - 'Litigation' vs 'Arrears' - Section 124 of Finance Act, 2019 - The petitioner's application under the scheme was rejected on the ground that the matter was not pending as 'litigation' but as 'arrears'. The court held that since an appeal was pending before the Commissioner (Appeals) at the time of application, the case fell under the 'litigation' category. The rejection was quashed and respondents directed to reconsider the application under 'litigation' category (Paras 2, 10-12). B) Constitutional Law - Writ Jurisdiction - Article 226 of Constitution of India - The High Court exercised its writ jurisdiction to quash the rejection order and direct reconsideration, finding that the respondents' interpretation of the scheme was erroneous and that the petitioner's application was wrongly rejected (Para 12).
Issue of Consideration
Whether the rejection of the petitioner's application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 under the category of 'litigation' was valid, and whether the petitioner is entitled to have its application considered under the said category.
Final Decision
The court quashed the rejection orders dated 13.01.2020 and 30.01.2020 and directed the respondents to reconsider the petitioner's application under the 'litigation' category within four weeks. If found in order, the respondents shall issue the requisite certificate under the scheme.
Law Points
- Sabka Vishwas (Legacy Dispute Resolution) Scheme
- 2019
- Section 124 of Finance Act
- Article 226 of Constitution of India
- Central Excise Act
- 1944
- Legal Metrology Act
- 2009
