The rejection of an application under the SVLDR Scheme without affording an opportunity to be heard violates the principles of natural justice and offends Article 14 of the Constitution of India. The SVLDR Scheme is required to be interpreted liberally to further its object.

JUDGMENT

Vibhu Bakhru, J.

1. The petitioner has filed the present petition under Article 226 of the Constitution of India impugning the decision of the concerned authority to reject the petitioner's application under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 (hereafter `the SVLDR Scheme'). The petitioner had filed the said application online in the prescribed format - Form SVLDRS-I. The said application was rejected and the ground for rejection along with the remarks were communicated online. The petitioner's application was rejected on the ground of "ineligibility" with the remarks, "incomplete and selective declaration".

2. According to the respondents, the designated authority had, on examination of the petitioner's application, noticed the following:

2.1 The petitioner had wrongly availed cess amounting to Rs.3,16,946/- in TRAN-1. The petitioner had reversed the said amount on 31.03.2019 but the interest amounting to Rs.83,231/- along with penalty was recoverable from the petitioner;

2.2 The petitioner had deposited the service tax amount of Rs.92,385/-, which was found due on ST-3 reconciliation but had not deposited the interest and penalty;

2.3 The petitioner had wrongly availed the Cenvat Credit amounting to Rs.8,05,654/- on services relating to rent a cab, medical insurance, and hotel accommodation, which was deposited by the petitioner but the interest and penalty remained outstanding; and

2.4 The petitioner had wrongfully availed the Cenvat Credit amounting to Rs.82,81,915/- on exempted income under Rule 6(3) of the Cenvat Credit Rules, 2004. The petitioner had deposited the said amount but the applicable interest and penalty was outstanding.

3. According to the respondents, the petitioner's declaration submitted under the SVLDR Scheme covered the aforesaid liabilities but the amount shown by the petitioner under columns relating to duty details and pre-deposit of duties was erroneously reflected as Rs.82,81,915/-. According to the respondents, the amount of duty mentioned in the petitioner's application ought to have included an amount of Rs.3,16,946/- on account of wrongful availment of cess; an amount of Rs.92,385/- of service tax deposited on reconciliation of ST-3 returns; and an amount of Rs.8,05,654/- on account of wrongful availment of the Cenvat Credit.

4. In view of the above, the principal question to be addressed is whether the rejection of the petitioner's application on the ground that the amount mentioned under the duty details and the amount of duty deposited did not include the three amounts as mentioned above, is justified.

Factual context

5. The petitioner is a company set up under Section 25 of the Companies Act, 1956 by the Ministry of Textiles, Government of India, inter alia, with the object of promoting export of Indian handmade woolen and silk carpets, draggers, rugs etc.

6. The accounts of the petitioner were subjected to a service tax audit for the period 2013-14 to June 2017, by the respondents. During the course of the audit, certain objections were raised. This included the objection regarding wrongful availment of the Cenvat Credit on exempted income being the grants-in-aid received from the Ministry of Commerce and the Ministry of Textiles. According to respondent no.2, the proportionate amount of the Cenvat Credit amounting to Rs.82,81,915/- was required to be reversed. In addition, the respondents also found that the petitioner had wrongly availed cesses amounting to Rs.3,16,946/-, which were reversed but the interest and penalty amounting to Rs.83,231/- remained outstanding. In addition, respondent no.2 also found that the petitioner had short-paid service tax to the extent of Rs.92,385/-. The same was deposited but the interest and penalty on the said amount remained outstanding. Further, the petitioner had also availed the Cenvat Credit amounting to Rs.8,05,654/- on rent a cab, medical insurance and hotel accommodation. The same had been reversed but interest