Section 3 of the Direct Tax Vivad Se Vishwas Act, 2020 assumes jurisdiction “.. where a declarant files under the provisions of this Act on or before the last date, a declaration to the designated authority in accordance with the provisions of section 4 in respect of tax arrear, ..” .
There is no provision in the DTVSV Act that makes it mandatory for an apellant to file a declaration under Section 3 of the Act. It appears to be an option to the appellant to voluntary decide to file a declaration or otherwise.
It would be prudent for the CBDT to excercise its powers under section 10 of the DTVSV Act and direct the Income tax authorities to refrain from interfering in any manner with the voluntary decision of the appellant to file a declaration or decide otherwise to settle the case pending at a judicial forum. It would also require CBDT to not set any Revenue Targets for Income Tax Authorities under DTVSV Act leading to undue pressure on Income Tax Authorities.
However, there have been news reports of Tax Officials calling upon Assessees to settle cases to meet their Revenue targets. The question is whether this action by ITD Authorities tantamounts to Criminal Intimidation under Section 503 of IPC and judicial recourse available to appellant.
Section 503 of Indian Penal Code specifies Criminal intimidation as :: “Whoever threatens another with any injury to his person, reputation or property, or to the person or reputation of any one in whom that person is interested, with intent to cause alarm to that person, or to cause that person to do any act which he is not legally bound to do, or to omit to do any act which that person is legally entitled to do, as the means of avoiding the execution of such threat, commits criminal intimidation.
Explanation.—A threat to injure the reputation of any deceased person in whom the person threatened is interested, is within this section.
A, for the purpose of inducing B to desist from prosecuting a civil suit, threatens to burn B’s house. A is guilty of criminal intimidation.
(Highlighted to point emphasis).
Section 506 of the IPC prescribes the punishment for Criminal Intimidation as “Whoever commits, the offence of criminal intimidation shall be punished with imprisonment of either description for a term which may extend to two years, or with fine, or with both; …”
We also need to note that public servants are immune from criminal prosecution without sanction by the appropriate Government.
So the question that arises is what recourse may be available to an apellant in such a scenario. There is no judicial remedy which has been instituted under the DTVSV Act, 2020. An absence of “alternative remedy” coupled with violation of fundamental right of liberty under Article 20 (Threat of prosecution) and constitutional right of property under Article 300A (No person shall be deprived of property save by authority of law) should be sufficient grounds to invoke the writ jurisdiction of High Courts under Article 226 of the Constitution of India.
Writ of Prohibition
The Writ of prohibition means to forbid or to stop. This writ is issued when a lower court or a body tries to transgress the limits or powers vested in it. We have already discussed above that
a. the provisions of DTVSV Act are voluntary, to be exercised at the option of the appellant,
b. no power is vested in the Income Tax Authorities to instruct the appellant under the DTVSV Act.
In this scenario, for appellants moving individually to the High Courts this may be an appropriate judicial recourse.
Class Action suit by way of Public Interest Litigation before the Supreme Court of India
Another option may be by interested parties such as Chambers of Commerce or Tax Bar Association to seek directions to CBDT “to excercise its powers under section 10 of the DTVSV Act and direct the Income tax authorities to refrain from interfering in any manner with the voluntary decision of the appellant to file a declaration or decide otherwise to settle the case pending at a judicial forum. It would also require CBDT to not set any Revenue Targets for Income Tax Authorities under DTVSV Act leading to undue pressure on Income Tax Authorities.”