Sabka Vishwas credit for pre-adjudication deposits must be allowed when supported by challans and verified records.

Under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, a verified deposit made after the show cause notice but before adjudication must be credited while computing tax dues where the statutory framework and clarificatory circular permit such adjustment. The court found that the petitioner's payment was supported by challans and was not shown to be fictitious or otherwise disproved on merits. Technical objections and unverified database entries could not override the scheme's settlement purpose or defeat the claimant's entitlement to credit for the deposit. The impugned exclusion of the amount was therefore unsustainable, and the matter required fresh verification and issuance of a revised statement after accounting for the deposit.

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Issues: Whether the amount of Rs. 32,12,000/- deposited after issuance of the show cause notice and before adjudication had to be taken into account while computing the tax dues under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, and whether the impugned statement excluding that amount could be sustained.

Analysis: The declaration under the scheme was required to be processed in the light of Section 124 of the Finance (No. 2) Act, 2019 and the clarification issued in Circular No. 1074/07/2019-CX dated 12.12.2019, which recognised that deposits made after the show cause notice but before adjudication could be adjusted while issuing the statement of amount payable. The record showed that the petitioner's payment of Rs. 32,12,000/- was supported by challans and was not shown to be fictitious or denied on merits. The authorities relied on technical objections and electronic database entries without properly verifying the factual claim, although the scheme was intended to facilitate settlement of genuine disputes and not to defeat legitimate entitlement by a hyper-technical approach.

Conclusion: The exclusion of the deposited amount was unsustainable, and the petitioner was entitled to reconsideration of the declaration after giving credit for Rs. 32,12,000/-.

Final Conclusion: The impugned statement was set aside and the matter was remitted for fresh verification and issuance of a revised statement after accounting for the disputed deposit.

Ratio Decidendi: Under the Sabka Vishwas scheme, a verified pre-adjudication deposit supported by challans cannot be ignored on a merely technical basis and must be adjusted while determining the amount payable when the statute and clarificatory circular permit such credit.

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