Declaration under Sabka Sath Sabka Vishwas Legacy scheme rejected- Bombay High court sets aside the rejection order allowing the Writ.

The Bombay High court in the case of Thought Blurb Vs Union of India & Ors in WP No 871 of 2020 on 27th October, 2020 was dealing with a writ where the petitioner challenged rejection of its declaration filed in respect of service tax liability under the Service Tax legacy scheme. The reason for rejection of application was that the case of the petitioner was related to investigation and the demand had not been qualified within 30th June, 2019 and thus the petitioner was in eligible under the scheme even though it had paid the amount as per the scheme. Moreover, while rejecting the application no opportunity of hearing was granted. The Bombay high court noted that the word “quantified” has been defined in section 121(r) to mean a written communication of the amount of duty payable under the indirect tax enactment and the department by a written communication had informed the petitioner about the liability and thus it could not be said that the demand was not quantified. Moreover Summary rejection of an application without affording any opportunity of hearing to the declarant would be in violation of the principles of natural justice. Rejection of application (declaration) will lead to adverse civil consequences for the declarant as he would have to face the consequences of enquiry or investigation or audit. Finally the writ was allowed and the department was ordered to accept the application.

This judgement will be helpful in solving similar disputes under the Vivad Se Vishwas Scheme also.

Ramesh Patodia
29-10-2020