The Delhi High Court on Monday said it expected the Centre to “scrupulously” follow the provisions of Sabka Vishwas (Legacy Dispute Resolution) Scheme 2019 meant for settlement of excise and service tax disputes. “We expect the respondent (Centre) to scrupulously follow the provisions of the scheme and the Finance Act,” a bench of Chief Justice D N Patel and Justice C Hari Shankar said.
The observation by the court came when it declined to entertain a plea challenging a government circular which purportedly provided the benefits of the scheme to tax disputes where the final hearing has taken place on or before June 30. The scheme, enacted for settlement of disputes pertaining to levies subsumed in the Goods and Service Tax (GST), provides substantial relief to taxpayers in the form of full waivers of interest, penalties, and fines as well as complete amnesty from prosecution proceedings.
The court upheld the circular, which according to the plea also covered pending cases in the “arrears” category under the scheme, saying it was “not prima facie violative of the scheme or the Finance Act” and dismissed the petition by a lawyer, Nidhi Gupta. The central government, represented by advocate Farman Ali Magray, opposed the plea saying there was nothing wrong with the circular.
The petition had contended that making the scheme applicable to disputes, where the final hearing has taken place on or before June 30 or where the tax amount has not been quantified or communicated before that date, will cause a substantial loss to the exchequer.
The plea had contended that providing relief in disputes, where the final hearing was over on or before June 30 or where demand was not quantified or communicated prior to that date, will lead to the government losing 50-60 percent of tax revenues as well as the entire amount of penalty and interest. It will also lose the entire amount of penalty imposed on co-notices, the petition had claimed.