Messrs S. S. Industries And Ors vs. The Union Of INDIA And Ors

Facts

The petitioners, including a partnership firm (Petitioner No.1), its partner (Petitioner No.2), and a co-noticee (Petitioner No.3), challenged the rejection of nine declarations filed under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (SVLDR Scheme). The rejections were issued by the Commissioner, CGST & CX, Mumbai East Commissionerate and other subordinate authorities. The declarations pertained to redemption fine and penalty issues. One declaration (LD2712190000801) was rejected for being based on a bank guarantee and not quantified. Six other declarations (LD2712190004458, LD2712190003439, LD2712190003717, LD2712190003221, LD2712190003805, LD2712190004288) were rejected on similar grounds, including incorrect category. Another declaration (LD2712190003630) by Petitioner No.2 was rejected for alleged duplicacy. The final declaration (LD2712190004904) by Petitioner No.3 was rejected because the amount was allegedly not quantified before June 30, 2019, and investigations were ongoing.

Held

The Court held that the rejection of declaration No.LD2712190000801 was not sustainable. The respondents admitted that the stated ground of rejection (non-quantification) was erroneously recorded. Furthermore, the issue of whether redemption fine is covered by the SVLDR Scheme was settled by this Court's decision in Messrs. Esbee Electrotech LLP & Ors. v. Union of India & Ors. The Court also noted that a bank guarantee is always given for a quantified amount, thus the rejection could not be sustained on this ground. The respondents were directed to accept the declaration and communicate any payment due within four weeks, with the petitioner to make payment within two weeks thereafter, and the respondents to issue the SVLDRS-4 certificate within four weeks of payment confirmation. Similarly, for the six declarations rejected on grounds of bank guarantee, non-quantification, and incorrect category, the Court found the issue covered by the Esbee Electrotech case and directed acceptance of these declarations with consequential directions for payment and certificate issuance. Regarding the rejection of declaration No.LD2712190003630 on grounds of duplicacy, the Court found the rejection unjustified as the petitioner had withdrawn the initial application filed with the wrong Commissionerate before filing a fresh one with the correct one, a fact not disputed by the respondents. The respondents were directed to accept this declaration and proceed with payment and certificate issuance. For declaration No.LD2712190004904, the Court held that since the main noticee (Petitioner No.1) was allowed the benefits of the SVLDRS Scheme, the co-noticee (Petitioner No.3) was consequently entitled to have their declaration accepted. The respondents were directed to accept this declaration and proceed with payment and certificate issuance. The Court found that the reasons for rejection in all cases were either erroneously stated, covered by previous judgments, or factually incorrect based on undisputed submissions.

Key Issues

1. Whether the rejection of declaration No.LD2712190000801 on the grounds that the application cannot be filed on the basis of a bank guarantee and that the amount is not quantified is sustainable, particularly in light of the petitioner's contention that quantification was not an issue for this declaration and that redemption fine is covered by the SVLDR Scheme, as per the decision in Messrs. Esbee Electrotech LLP & Ors. v. Union of India & Ors.? 2. Whether the rejection of six declarations (Nos.LD2712190004458, LD2712190003439, LD2712190003717, LD2712190003221, LD2712190003805, and LD2712190004288) on the grounds that the application cannot be filed on the basis of a bank guarantee, the amount is not quantified, and the category is incorrect, is valid, considering the parties' agreement that this issue is covered by the decision in Messrs. Esbee Electrotech LLP & Ors. v. Union of India & Ors.? 3. Whether the rejection of declaration No.LD2712190003630 on the ground of duplicacy is justified, given the petitioner's explanation that a prior application was withdrawn due to being filed with the wrong jurisdictional Commissionerate before a fresh application was filed with the correct one? 4. Whether the rejection of declaration No.LD2712190004904 on the grounds that the amount was not quantified before June 30, 2019, and that investigations were ongoing, is sustainable, especially since the main noticee (Petitioner No.1) had their declaration accepted? Petitioner's arguments: The grounds for rejection were erroneous. For declaration LD2712190000801, quantification was not an issue, and redemption fine is covered by the Scheme, as per the Esbee Electrotech case. For the six declarations, the issue is covered by the Esbee Electrotech case. For declaration LD2712190003630, there was no duplicacy as the first application was withdrawn. For declaration LD2712190004904, since the main noticee's declaration was accepted, the co-noticee's should also be accepted. Respondents' arguments: The respondents did not dispute that the ground of non-quantification for declaration LD2712190000801 was erroneously stated. They also did not dispute that the issue of redemption fine coverage was concluded by the Esbee Electrotech case. For declaration LD2712190003630, the respondents did not dispute the petitioner's contention regarding the withdrawal of the first application. For declaration LD2712190004904, the parties agreed that the issue was covered by the decision in Petitioner No.1's case.