Sabka Vishwas Scheme eligibility extends to a pending appeal from rectification rejection, with liberal construction of the litigation category.

A pending appeal against rejection of rectification under the Finance Act, 1994 was treated as part of the same continuing dispute, because the rectification order modified and merged with the original adjudication order and remained appealable. The Court held that the terms "order" and "appellate forum" in the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 were wide enough to cover that composite dispute, and that a pending appeal on 30 June 2019 satisfied the litigation-category requirement. Applying a liberal construction as a beneficial settlement scheme, the declaration was eligible under the litigation category, not the arrears category, and the contrary view was quashed with remand for fresh consideration.

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Issues: Whether an appeal pending under Section 85 of the Finance Act, 1994 against rejection of a rectification application under Section 74 of the Finance Act, 1994 entitled the declarant to opt for the litigation category under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, and whether the impugned declaration could be treated as falling only under the arrears category.

Analysis: The declaration was filed before the scheme came into force, while the underlying show cause notice, order in original, rectification proceedings, and appeal were all part of the same continuing dispute. An order passed on a rectification application under Section 74 of the Finance Act, 1994 was held to modify and merge with the original adjudication order and remained appealable under Section 85 of the Finance Act, 1994. The expression "order" in Section 121(o) of the Scheme was held wide enough to include the original order as modified by rectification, and "appellate forum" in Section 121(f) was not confined to appeals against the original order alone. Since the appeal was pending on 30 June 2019, the declarant satisfied Section 125(1) of the Scheme. The Court also applied the settled principle that the Scheme is a beneficial legacy-settlement measure warranting a liberal and purposive construction.

Conclusion: The declaration was eligible to be considered under the litigation category, and the contrary view treating it as an arrears matter was unsustainable.

Final Conclusion: The impugned statement was quashed, the declaration was restored for consideration under the litigation category, and the matter was remanded to the designated authority for fresh action in accordance with the Scheme.

Ratio Decidendi: For eligibility under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, a pending appeal against an order refusing rectification of an original adjudication order is part of the litigation category where the rectification order modifies and merges with the original order, and the scheme must receive a liberal construction as a beneficial dispute-resolution measure.

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