TMI Blog2021 (3) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... jected, an opportunity of hearing should be granted to the declarant. Though we do not find any such express provision in the scheme laying down requirement of hearing before rejection of the declaration, we find from section 127 more particularly under sub-sections (3) and (4) thereof that if the designated committee upon verification, determines the amount payable by the declarant to be higher than what is declared by the declarant, then an opportunity of hearing should be granted to a declarant. This coupled with what we have discussed in paragraph 19 above, makes hearing before rejection obligatory. This aspect of the matter was gone into by this Court in Thought Blurb Vs. Union of India [ 2020 (10) TMI 1135 - BOMBAY HIGH COURT ] . It has been held that in a situation where the amount estimated by the designated committee is in excess of the amount declared by the declarant, an opportunity of hearing is required to be given by the designated committee to the declarant, then it would be in complete defiance of logic and contrary to the very object of the scheme to outrightly reject a declaration on the ground of being ineligible. Summary rejection of a declaration with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on) Scheme, 2019 (briefly the scheme hereinafter) vide the Finance (No. 2) Act, 2019 for settlement of legacy disputes pertaining to service tax and central excise providing for substantial reliefs to the declarants subject to eligibility. 5. In terms of the scheme, petitioner submitted declaration dated 25.12.2019 under the category of 'voluntary disclosure' covering the period from 01.04.2016 to 31.03.2017 declaring service tax dues for the said period at ₹ 39,26,235.00 6. However, vide email dated 21.01.2020, the aforesaid declaration of the petitioner was rejected on the ground of ineligibility. Reason for rejection was mentioned as being ineligible under section 125(1)(f)(i) read with section 121(m) of the Finance (No. 2) Act , 2019. 7. When the petitioner inquired with the authorities the justification for such rejection, it was informed that because of letter dated 24.07.2019 which was issued to the petitioner by the Assistant Commissioner, Division-I, CGST CX, Belapur Commissionerate for the period 2015-16 declaration of the petitioner was rejected on the ground of ineligibility. 7.1. In so far letter dated 24.07.2019 is concerned, it is stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erway may incorporate the period 2016-17 thus rendering the petitioner ineligible. 12. Learned counsel for the petitioner submits that impugned rejection of the declaration of the petitioner is in violation of the principles of natural justice as no opportunity of hearing was granted to the petitioner before such rejection. That apart, no reasons have been assigned except the bald statement about ineligibility of the petitioner. An unreasoned order being in violation of the principles of natural justice is certainly arbitrary and unreasonable and is therefore liable to be appropriately interfered with by this Court. Learned counsel has referred to various provisions of the scheme where from he contends that the declaration of the petitioner for the period 2016-17 could not have been rejected by the respondents on the ground that the investigation presently underway may incorporate the period 2016-17 in future. Such a ground is no ground at all in the eye of law for rejection. In support of his contentions, learned counsel for the petitioner has filed a compilation of documents and judgments as well as written submissions. 13. On the other hand, Mr. Jetly, learned senior couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at a person after being subjected to any enquiry or investigation or audit would be ineligible to make a voluntary disclosure. 16.4. Section 126 deals with verification of declaration by designated committee. Proviso to sub-section (1) clarifies that no such verification shall be made in a case where voluntary disclosure of an amount of duty has been made by the declarant. 16.5. Section 129 provides that every discharge certificate issued under section 126 with respect to the amount payable under the scheme shall be conclusive as to the matter and time period stated therein. Section 129(2)(c) says that notwithstanding anything contained in sub-section (1) , in a case of voluntary disclosure where any material particular furnished in the declaration is subsequently found to be false within a period of one year of issue of the discharge certificate, it shall be presumed as if the declaration was never made and proceedings under the applicable indirect tax enactment shall be instituted. 16.6. Under section 131, for removal of doubts, it has been clarified that nothing contained in the scheme shall be construed as conferring any benefit, concession or immunity on the declarant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Having held so, let us deal with the contention of the petitioner that before a declaration is rejected, an opportunity of hearing should be granted to the declarant. Though we do not find any such express provision in the scheme laying down requirement of hearing before rejection of the declaration, we find from section 127 more particularly under sub-sections (3) and (4) thereof that if the designated committee upon verification, determines the amount payable by the declarant to be higher than what is declared by the declarant, then an opportunity of hearing should be granted to a declarant. This coupled with what we have discussed in paragraph 19 above, makes hearing before rejection obligatory. 21. This aspect of the matter was gone into by this Court in Thought Blurb Vs. Union of India 2020 SCC OnLine Bom 1909. It has been held that in a situation where the amount estimated by the designated committee is in excess of the amount declared by the declarant, an opportunity of hearing is required to be given by the designated committee to the declarant, then it would be in complete defiance of logic and contrary to the very object of the scheme to outrightly reject a declar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sputes of central excise and service tax as well as to ensure disclosure of unpaid taxes by a person eligible to make a declaration. The basic thrust of the scheme is to unload the baggage of pending litigations centering around service tax and excise duty. Therefore the focus is to unload this baggage of pre-GST regime and allow business to move ahead. We are thus in complete agreement with the views expressed by the Delhi High Court in Vaishali Sharma Vs. Union of India, WP(C) No. 4763 of 2020 decided on 05.08.2020 that a liberal interpretation has to be given to the scheme as its intent is to unload the baggage relating to legacy disputes under central excise and service tax and to allow the business to make a fresh beginning. 22. Since we find that impugned rejection of the declaration of the petitioner is in violation of the principles of natural justice which has impacted the decision making process thus rendering the decision invalid, it may not be necessary for us to enter into the merits of the challenge as to whether the declaration of the petitioner was in fact valid or not under the category of 'voluntary disclosure'. This is a matter which should be bes ..... X X X X Extracts X X X X X X X X Extracts X X X X
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