S. 124 of Finance Act, 2019 Not Violative of Article 14: Punjab & Haryana High Court

The Punjab and Haryana High Court has upheld the constitutional validity of Sections 124 and 130 of the Finance Act, 2019, which deal with the ‘Vivad se Vishwas Scheme’, dismissing the contention that the said provisions were violative of Article 14 of the Constitution of India since they deny refund to the assessee/ declarant even if the amount already deposited by it exceeds the amount payable under the Scheme. Section 124 of the Finance Act, 2019 provides that any amount paid as pre-deposit at any stage of appellate proceedings under the indirect tax enactment or as deposit during the enquiry, investigation or audit, shall be deducted while computing the amount payable by the declarant/ assessee under the ‘Vivad se Vishwas Scheme’. Referring to the relevant provisions of the Finance Act, 2019, the Court remarked that the legislature in its own wisdom has repeatedly reiterated that the declarant under the Scheme shall not be entitled for any refund, irrespective of the fact that the amount of pre-deposit or deposit already paid by the declarant exceeds the amount payable under the Scheme. Rejecting the petitioner’s contention that Section 124 of the Finance Act, 2019 violates Article 14 and breeds hostile discrimination, the Court said, “Trite it is wooden equality is neither feasible nor the mandate of Part-II of the Constitution of India.” The bench further held that though the Finance Act, 2019, has been enacted with reference to a fiscal statute, it does not create or exempt levy of tax.