M/S E.I. Dupont INDIA Private Limited vs. Designated Committee-1

Facts

M/s E.I. Dupont India Private Limited (the petitioner) filed a writ petition challenging the rejection of its application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The petitioner was engaged in manufacturing polymers and other chemical products. An audit for the period June 2014 to June 2017 by the CGST and Central Excise office identified discrepancies, leading to a demand letter on June 28, 2019, for approximately Rs. 2.52 crore. The petitioner, seeking to resolve this dispute, filed a declaration under the Scheme on December 21, 2019, quantifying the payable amount at Rs. 1,22,18,781.05. The Designated Committee-1 issued a statement in Form SVLDRS-2 on February 7, 2020, and subsequently rejection letters dated May 5, 2020, and June 11, 2020, were issued, rejecting the petitioner's application.

Held

The Court held that the rejection of the petitioner's application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, was in violation of the principles of natural justice. The Court found that the Designated Committee-1 failed to provide specific reasons for the rejection, particularly concerning any variance in the quantified amount. The statement in Form SVLDRS-2 and the subsequent rejection letters lacked the necessary specificity to inform the petitioner of the grounds for rejection, thereby denying them a fair opportunity to respond or seek a personal hearing. The Court emphasized that any order with civil consequences must be preceded by an opportunity to be heard, citing the Supreme Court's observation in Prakash Vs. State of Bihar. Consequently, the Court quashed and set aside the statement in Form SVLDRS-2 dated February 7, 2020, and the rejection letters dated May 5, 2020, and June 11, 2020. The Designated Committee was directed to decide the petitioner's application afresh after providing an opportunity of hearing and passing a reasoned order within eight days.

Key Issues

1. Whether the rejection of the petitioner's application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, by the Designated Committee-1, as communicated through letters dated May 5, 2020, and June 11, 2020, and the statement in Form SVLDRS-2 dated February 7, 2020, was in violation of the principles of natural justice, specifically the right to a fair hearing and adequate reasons for rejection, as contemplated under the Finance (No.2) Act, 2019 and related rules. Petitioner's Arguments: The petitioner argued that the rejection was arbitrary and lacked proper justification. They contended that the respondent failed to provide specific reasons or details regarding any variance in the quantified amount, preventing them from offering a proper response or seeking a personal hearing. The rejection was mechanical and did not adhere to the principles of natural justice, which mandate an opportunity to be heard before an order with civil consequences is passed. They relied on the principle that administrative authorities must act fairly. Revenue's Arguments: The judgment does not explicitly record arguments made by the revenue or the respondent.