Taxpayers eligible even if probe begins after amnesty scheme: High Court

Saurabh Malik
Tribune News Service
Chandigarh, March 3

In a significant judgment on availing the benefits of the ‘amnesty scheme’ by the taxpayers, the Punjab and Haryana High Court has made it clear that inquiry, audit or investigation initiated after its introduction could not make a person ineligible.

The ruling by the Bench of Justice Jaswant Singh and Justice Sant Parkash came on a bunch of two petitions filed by Gurugram-based firms against the Principal Commissioner, Central Goods and Services Tax, Haryana, and another respondent.

Win-win situation

The Bench asserted the government introduced the ‘amnesty scheme’ to reduce the luggage of litigation and realise pending dues. The litigants benefitted as they got immunity from interest and penalty and the government realised the dues without litigation.

The petitioners, among other things, were seeking the quashing of orders whereby their declarations filed under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, were rejected on the sole ground that the department had already initiated inquiry prior to the filing of the declaration.

The Sabka Vishwas Scheme, also known as the ‘amnesty scheme’, was introduced by Finance Act, 2019, for ‘voluntary disclosure’ and was a part of the taxing statute.

The Bench asserted the government introduced it to reduce the luggage of litigation and realise pending dues. The litigants benefitted as they got immunity from interest and penalty and the government realised the dues without litigation.

Dubbing the scheme as “a piece of beneficial legislation”, the Bench asserted the courts were flooded with avoidable litigation and the government, by way the present scheme, had initiated a step to minimise litigation and generate revenue.

Liberal interpretation, which made the scheme successful, was required to be advanced. Strict interpretation frustrating the intent and purport of the beneficial legislation was required to be avoided.

The Bench added the petitions deserved to be allowed on the ground that notices/summons initiating inquiry/investigation were issued after September 1, 2019 — the date of commencement of the scheme.

“The scheme came into force from September 1, 2019. Any inquiry, audit or investigation initiated after the date cannot make any person ineligible because period running from September 1, 2019 to December 31, 2019 is meant for filing application. Any event occurring after September 1, 2019 cannot make any person eligible or ineligible. Any other interpretation would be violative of scheme as well Article 14 of the Constitution because there would be discrimination between two persons similarly situated on September 1, 2019, but inquiry is initiated against any one of them”.

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