Ibm INDIA Private Limited vs. Union Of INDIA

Facts

The petitioner, IBM India Private Limited, filed a writ petition challenging an email dated March 11, 2020, issued by Respondent No. 4. The petitioner had sought to avail the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme). After a show cause notice was issued by the respondents, the petitioner filed a declaration in Form SVLDRS-1 on December 19, 2019, which was rejected. A fresh declaration was filed on December 26, 2019. Subsequently, Respondents 4 and 5 informed the petitioner that it was ineligible for the scheme because the show cause notice involved a demand of interest only, citing Section 123(b) of the Finance Act, 2019. The petitioner responded on February 13, 2020, providing detailed submissions and documents, asserting its eligibility. Despite this, Respondent No. 4 issued the impugned communication rejecting the petitioner's application.

Held

The Court held that the impugned order/communication dated March 11, 2020, issued by Respondent No. 4 was a non-speaking, cryptic, laconic, and unreasoned order. It was passed without proper application of mind, failing to consider the petitioner's detailed submissions, the relevant provisions of the SVLDR Scheme, and the circulars and judgments relied upon by the petitioner. Consequently, the Court found the impugned order to be violative of the principles of natural justice. The Court quashed the impugned order and remitted the matter back to the concerned respondents for a fresh reconsideration of the petitioner's claim. The reconsideration is to be done bearing in mind the observations made in the order, the material on record, including the specified CBIC circulars and the judgments relied upon by the petitioner, and in accordance with the law, as expeditiously as possible. No specific issue was left undecided.

Key Issues

1. Whether the petitioner is eligible to avail the benefit of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, when the show cause notice issued by the respondents involved a demand of interest only, and if Section 123(b) of the Finance Act, 2019, disentitles such eligibility? (Mixed question of law and fact, turning on Section 123(b) of the Finance Act, 2019). Petitioner's contention: The petitioner argued that the benefit of the SVLDR Scheme is available even in cases where interest has been demanded. They relied on CBIC Circulars dated October 29, 2019, and October 6, 2022, and judgments from the Apex Court and High Courts, including the Madhya Pradesh High Court in Sigma Construction Company vs. Union of India & Others, to support their claim that interest demands do not preclude eligibility. Respondents' contention: The respondents argued that the petition has no merit and is liable to be dismissed.