The Commissioner Of CGST And Central Excise Delhi South vs. Smart Rangers PVT LTD
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The Commissioner of CGST and Central Excise filed a writ petition challenging an Order-in-Appeal dated December 31, 2020, passed by the Commissioner of Central Tax (Appeals). This appeal was filed by Smart Rangers Pvt Ltd (the respondent) against an order of the Designated Committee under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDRS). The Designated Committee had rejected Smart Rangers' application for settlement. The Commissioner argued that the appeal before the Commissioner (Appeals) was not maintainable because the SVLDRS scheme conferred finality on the Designated Committee's orders. The petitioner contended that the Designated Committee correctly found the application not maintainable due to an ongoing investigation.
Held
The Court held that a statutory appeal before the Commissioner (Appeals) was not maintainable against an order of the Designated Committee under the SVLDRS, 2019, as the scheme accorded finality to such decisions. Regarding the eligibility of the respondent, the Court found that Smart Rangers Pvt Ltd was ineligible to claim the benefit of the SVLDRS due to an ongoing investigation into its affairs. This fact was admitted by the respondent, as evidenced by their declaration filed before the Designated Committee. The Court noted that the Designated Committee had correctly rejected the application on this ground. The Court further observed that even if there was a perceived violation of the principles of natural justice, it would not redeem the respondent's case, as their ineligibility was admitted, and no prejudice could be said to have been caused by the lack of an opportunity of hearing. Consequently, the writ petition was allowed, and the impugned Order-in-Appeal dated December 31, 2020, was quashed and set aside.
Key Issues
1. Whether an appeal before the Commissioner (Appeals) was maintainable against an order passed by the Designated Committee under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, considering the finality provisions of the scheme? (Question of law) 2. Whether the respondent, Smart Rangers Pvt Ltd, was eligible to make a declaration under the SVLDRS, 2019, given that an investigation into its affairs was ongoing on or before June 30, 2019? (Question of mixed law and fact) Contentions: Petitioner (Commissioner of CGST and Central Excise): The SVLDRS scheme, introduced by the Finance Act (No. 2) 2019, confers finality on the orders of the Designated Committee. Therefore, an appeal against such an order is not maintainable. Section 125 of the Finance Act stipulates conditions for eligibility, and an ongoing investigation, as in this case, disqualifies an applicant. The Designated Committee correctly rejected the application based on these provisions. Respondent (Smart Rangers Pvt Ltd): The judgment does not record specific arguments made by the respondent regarding the maintainability of the appeal or their eligibility. However, their act of filing an appeal before the Commissioner (Appeals) and subsequently before this Court suggests a challenge to the Designated Committee's order and their ineligibility.
Sections Cited
Section 125
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Cause title — parties, addresses and appearances
O R D E R %
2025
The Commissioner of Central Goods and Services Tax and Central Excise1 petitions this Court by way of Article 226 of the Constitution, seeking to assail the Order-in-Appeal dated 31 December 2020 passed by the Commissioner of Central Tax (Appeals). The said appeal itself had come to be instituted by the respondent seeking to impugn an order passed by the Designated Committee under the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 20192. 2. The Commissioner would argue that the appeal was clearly not maintainable since the order of the Designated Committee is conferred finality and is one which is made under a special dispensation which is provided for by Finance Act (No. 2) 20193 and which had introduced
1 Commissioner 2 SVLDRS 3 Finance Act This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 19:05:55 the SVLDRS.
Mr. Ramachandran, learned counsel representing the writ petitioner, has taken us through the various provisions which came to be introduced by virtue of the Finance Act and more particularly to those appearing in Chapter V thereof, to submit that the Designated Committee had clearly found that the application as made for settlement would not be maintainable on account of an ongoing investigation.
Our attention was drawn to the conditions of eligibility which are stipulated in Section 125 and which reads as follows: - “Declaration under Scheme
(1) All persons shall be eligible to make a declaration under this Scheme except the following, namely;— (a) who have filed an appeal before the appellate forum and such appeal has been heard finally on or before the 30th day of June, 2019; (b) who have been convicted for any offence punishable under any provision of the indirect tax enactment for the matter for which he intends to file a declaration; (c) who have been issued a show cause notice, under indirect tax enactment and the final hearing has taken place on or before the 30th day of June, 2019; (d) who have been issued a show cause notice under indirect tax enactment for an erroneous refund or refund; (e) who have been subjected to an enquiry or investigation or audit and the amount of duty involved in the said enquiry or investigation or audit has not been quantified on or before the 30th day of June, 2019; (f) a person making a voluntary disclosure,— (i) after being subjected to any enquiry or investigation or audit; or (ii) having filed a return under the indirect tax enactment, wherein he has indicated an amount of duty as payable, but has not paid it; (g) who have filed an application in the Settlement Commission for settlement of a case; This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 19:05:55 (h) persons seeking to make declarations with respect to excisable goods set forth in the Fourth Schedule to the Central Excise Act, 1944 (1 of 1944). (2) A declaration under sub-section (1) shall be made in such electronic form as may be prescribed.”
As is manifest from the above, the SVLDRS contemplated such persons being eligible to apply for settlement and who would otherwise not fall within the exclusions contemplated under clauses (a) to (h) of Section 125(1).
The respondent has at no stage disputed the factum of an investigation being undertaken by the writ petitioner in respect of its affairs. In fact, and as is evident from a copy of the declaration which was filed by it before the Designated Committee, it had of its own volition shown that it fell in the category of a person under investigation and enquiry. The fact of an enquiry and investigation being ongoing was also not disputed before us. It was the aforesaid undisputed facts which constrained the Designated Committee to proceed to reject the application which had been made.
We have no doubt in holding that under the scheme of the Finance Act read alongside the provisions of the SVLDRS, a statutory appeal was clearly not maintainable. This since a decision of the Designated Committee was accorded finality therein. We find that the appellate authority has rendered no finding contrary to what was found by the writ petitioners, namely, of the respondent being ineligible to claim benefit of the scheme in light of an ongoing investigation. In the absence of that aspect being disputed, the application under the SVLDRS itself was not maintainable.
We thus find ourselves unable to appreciate how a perceived violation of the principles of natural justice would have redeemed the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 19:05:55 cause of the writ petitioner. This, since in light of the admitted ineligibility, no prejudice could be said to have been caused and nor could any benefit have been accorded to the petitioner by according an opportunity of hearing. Accordingly and for all the aforesaid reasons, we find merit in the challenge which stand raised.
The writ petition is accordingly allowed. The impugned order dated 31 December 2020 is hereby quashed and set aside.
YASHWANT VARMA, J.
HARISH VAIDYANATHAN SHANKAR, J. JANUARY 28, 2025/akc This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 19:05:55
Reproduced from the public record of the Delhi High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.