In a recent decision dated 02.11.2020, Hon’ble High Court of Delhi has made an important ruling on the scope of Section 128 of Chapter-V: “Sabka Vishwas (Legacy Dispute Resolution Scheme), 2019.
Citation: Bhawna Malhotra v. Union of India, W.P (C) 7350/2020, Delhi High Court dated 02.11.2020
As per the facts of the case, the Petitioner filed declaration under the Scheme, in respect of demand cum show cause notice dated 24.10.2018. However, instead of filing declaration under the category, “Litigation”, the Petitioner inadvertently and due to clerical error, filed the Declaration under “voluntary disclosure”.
SVLDRS-3 was issued by the Designated Committee and since the declaration was filed under voluntary disclosure, the Petitioner was not entitled to any relief of tax dues. Accordingly, the Petitioner had filed rectification application, which was rejected.
Petitioner prayed for direction to Respondent Commitee to allow it to rectify the declaration dated 30.12.2019 and consider it as one filed under the ‘litigation’ category instead of ‘voluntary disclosure category’ and grant consequential benefits.
Mistake is procedural/ clerical error apparent on face of record and of inadvertent nature
The Court, on assessment of the facts of the case, came to conclusion that Petitioner’s mistake is not only a procedural/ clerical error that is apparent on the face of the record but is also of an inadvertent nature not deliberately made to claim an undue benefit which the party was otherwise not entitled.
Error/ mistake apparent on face of record by the Applicant would also fall within the ambit of Section 128
One of the plea of the Petitioner before the Court was to read down Section 128 to hold that any clerical or arithmetic error made by an applicant in SVLDRS-1 also falls within the ambit of the said Section.
In this regard, the said Provision is extracted hereunder:
Rectification of errors.
128. Within thirty days of the date of issue of a statement indicating the amount payable by the declarant, the designated committee may modify its order only to correct an arithmetical error or clerical error, which is apparent on the face of record, on such error being pointed out by the declarant or suo motu, by the designated committee.
On perusal of scope and ambit of Section 128 of the Act, the Court observed that the said provision does not state that an error/ mistake apparent on the face of the record that can be rectified is of the designated committee alone. Accordingly, it was held that an error/ mistake apparent on the face of the record by the declarant/ assessee/ applicant would also fall within the scope and ambit of Section 128 of SVLDRS.
It was further observed that if the error/ mistake committed by the declarant/ assessee/ applicant while filing the form is not rectified, it is bound to result in a mistake/ error in the decision/ order passed by the designated committee. It was thus held:
Consequently, an error committed by the assessee, which inevitably leads to an error in the order of the designated committee, can be rectified by the designated committee under Section 128 of SVLDRS.
Issue is no longer res integra
The Hon’ble Court also relied upon the decision of Gauhati High Court in the case of Urban Systems v. Union of India 2020 (9) TMI 121, wherein in the context of mistake committed by Petitioner while filing the declaration under SVLDRS, the Court observed that mistake made by the Petitioner by not stating about the penalty imposed upon them in Form SVLDRS-1 cannot be said to be a mistake by which the Petitioner claimed an undue benefit which they otherwise are not entitled under the law. Accordingly, the High Court allowed the Petitioner to make necessary correction in the information provided, and directed the Authorities to pass appropriate order.
Keeping in view the aforesaid proposition of law, the Delhi High Court quashed the impugned SVLDRS-3 and directed the Respondent to rectify the declaration and consider it as one filed under ‘litigation’ category instead of ‘voluntary disclosure’ and to process the same in accordance with law within 4 weeks.