A declarant seeking remedy under SVLDR Scheme, 2019 shall be given an opportunity of being heard if their declaration is rejected

The Madhya Pradesh High Court has ruled that individuals applying for the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS) must be given an opportunity to be heard if their declaration is rejected. The court found it illogical to deny benefits under this beneficial scheme without allowing declarants to explain any perceived flaws in their application. This decision upholds the principles of natural justice.

The Hon’ble Madhya Pradesh High Court in M/s Balaji Publicity vs. Union of India and others [WP No.3133/2021 and W.P. No.3130/2021 decided on October 5, 2021] has held that the Designated Committee under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 ("SVLDRS"), while examining declarations of applicants seeking benefits under the SVLDRS, is entitled to give the declarants an opportunity to be heard in case their declaration under the SVLDRS is rejected by the Designated Committee due to any flaw.  

Facts

M/s Balaji Publicity ("the Petitioner") is a propriety firm which decided to take benefit of the SVLDRS.

While filling the SVLDRS-1, application, they committed a mistake in regard of period of April 2014 to June 2017 against the column the date on which return was filed, as instead of dates of actual filling of each return for the period between April, 2014 to June, 2017, a single date was mentioned. The said mistake occurred because the online system was not accepting so many entries.

The Designated Committee under SVLDRS did not issue any SVLDRS-2 in respect of the declaration filed by the Petitioner as per the provision of SVLDRS and rejected the declaration by putting a remark ‘Incorrect application’.

Amongst other contentions, the Petitioner contended that, in any event, it deserved an opportunity to be heard in regard to the rejection of its application and that their declaration under the SVLDRS should be accepted as a valid declaration.

Issue

Whether a declarant is entitled to an opportunity of being heard once their application under SVLDRS is rejected?

Held

The Hon’ble Madhya Pradesh High Court in WP No. 3133/2021 and W.P. No. 3130/2021 decided on October 5, 2021 held as under:

• Observed that SVLDRS is a beneficent scheme and aim and object of it is to unload the baggage of pending litigation relating to service tax and excise duty. While interpreting it, its aim and object cannot be ignored. Hence, it will be completely illogical and contrary to the object of SVLDRS to reject an application on the ground of ineligibility without giving an opportunity to the declarant to explain as to why his declaration should not be accepted and why relief is not due to him. The principles of natural justice shall take the forefront in these issues and an opportunity to explain and being heard must be provided to the declarants.
• Hence, the Designated Committee’s action was found to be not justified in rejecting the Petitioners' application without giving them an opportunity. Accordingly, the appeal was allowed.
• The Petitioners were given the liberty to file online / offline fresh applications. In turn, the Court directed the Designated Committee to consider them as valid applications and take a decision on it expeditiously.
• It was also directed that in the event where the Designated Committee thinks that there is any flaw in the applications so preferred, the Petitioners shall be heard on that point and after following principles of natural justice, a fresh decision in the shape of a speaking order should be passed within a reasonable time by the Designated Committee.