Sabka Vishwas Scheme interpretation upheld on arrears classification and cut-off date clarification in the circular.

Rule 3 of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 was read with section 121(c) of the Finance Act, 2019 to assess whether the circular dated 25.09.2019 treated the relevant cut-off date and the category of "amount in arrears" consistently with the Scheme. The clarification in clauses (vii) and (viii) was regarded as compatible with the Scheme because a case may enter the arrears category once the underlying order attains finality or the appeal period expires, and the 30.06.2019 cut-off does not operate uniformly across every Rule 3 category. The circular was therefore considered to conform to the Scheme and the Act.

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Issues: Whether the circular dated 25.09.2019, issued in relation to the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, was contrary to the Scheme and the governing statutory provisions, particularly on the question of the relevant cut-off date and the scope of cases covered as "amount in arrears".

Analysis: Rule 3 of the Scheme permits declarations in specified categories of cases, and the definition of "amount in arrears" under section 121(c) of the Finance Act, 2019 was read with that Rule. On that basis, the clarification in clauses (vii) and (viii) of the circular was treated as consistent with the Scheme, because cases may still fall within the arrears category once the relevant order attains finality or the appeal period expires, and the 30.06.2019 cut-off does not apply uniformly to every category under Rule 3. The circular was therefore not found, at least prima facie, to be inconsistent with the Scheme or the Act.

Conclusion: The circular was held to be in conformity with the Scheme, 2019 and the relevant Act, and the challenge to it failed.

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