The quantification of tax dues prior to a specified cut-off date is critical for eligibility under the SVLDRS Scheme, and the existence of valid quantification fulfills the eligibility criteria.

JUDGMENT :

M.S. SONAK, J.

1. Heard learned counsel for the parties.

2. Rule. The rule is made returnable immediately at the request and with the consent of the learned counsel for the parties.

3. The Petitioner challenges the rejection of its Application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (“the SVLDRS Scheme”) and the consequent orders including show cause notice dated 23 February 2021, on various grounds, including inter-alia, non-consideration of CBIC Circular dated 27 August 2019, and the answers to the Frequently Asked Questions (FAQs), prepared by the Department on 24 December 2019.

4. At the outset, Mr Mishra, the learned counsel for the Respondents, raised the issue of delay and laches. He pointed out that the impugned rejection was communicated to the Petitioner on 26 December 2019, but this Petition was instituted only on 19 April 2021. Accordingly, he submitted that this Petition ought not to be entertained due to delay and laches in its institution. He relied on Kundan Industries Limited Vs. Union of India and Ors. Writ Petition No. 5943/2021 disposed of by a Co-ordinate Division Bench of this Court on 01 April 2022 to support this contention.

5. We have considered the objection based on delay and laches, and in the circumstances of the present case, we are satisfied that such an objection cannot be upheld. Firstly, this Petition was not initiated after any unreasonable delay, which might have given rise to parallel rights in favour of the Respondents. Moreover, it is indisputable that the period between 26 December 2019 and 19 April 2021 was at least partially impacted by the COVID-19 pandemic. The details in Kundan Industries Limited (Supra) provide no valid comparison. Despite the leniency demonstrated by the authorities, the Petitioner, Kundan Industries Limited, failed to take action or approach the Court within a reasonable timeframe. For all these reasons, we do not uphold the objection based on delay or laches.

6. The Petitioner’s Application under the SVLDRS Scheme was rejected on the ground that the Petitioner was not found to be eligible. The alleged ineligibility was qualified or sought to be explained with the following remarks:

“Tax dues not quantified as on 30.06.2019 as reported by DGGI vide their letter No. DGGSTI/MZU/I&IS ‘C’/12(1) 250/2018 Dated 03.02.2020.”

7. The SVLDRS Scheme indeed requires the quantification of the tax dues as on 30 June 2019. However, the CBIC Circular dated August 27, 2019, clarifies the position. The clarification in para 10(g) of this Circular is quite relevant and transcribed below:

“(g) Cases under an enquiry, investigation or audit where the duty demand has been quantified on or before the 30th day of June, 2019 are eligible under the scheme. Section 2(r) defines "quantified" as a written communication of the amount of duty payable under the indirect tax enactment. It is clarified that such written communication will include a letter intimating duty demand; or duty liability admitted by the person during enquiry, investigation or audit; or audit report etc."”

8. In terms of the above clarification, the written communication as contemplated by Section 2(r) of the Finance (No.2) Act, 2019, would include a letter intimating duty demand, or duty liability admitted by the person during enquiry, investigation or audit, or audit report, etc. This position was further clarified through the answers to the FAQs, prepared by the Department on December 24, 2019.

9. If the Circular dated 27 August 2019 and the answers to the