Sabka Vishwas Scheme adjustment of pre-deposits must be applied to connected tax disputes and qualifying payments.

Under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, pre-deposits and other qualifying payments linked to the same dispute must be deducted when computing the amount payable. Section 124(2) of the Finance Act, 2019 requires adjustment of amounts paid at appellate, enquiry, investigation, or audit stages, and Board circulars also recognise deposits made after a show cause notice, including amounts paid under protest or not yet appropriated. The Scheme's own mechanism governs such adjustment, and the absence of credit through ST-3 returns does not defeat the claim. On these principles, the Designated Committee's restrictive estimate and statement were set aside for reconsideration.

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Issues: Whether, under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, the petitioner was entitled to adjustment of the full pre-deposit made in relation to the disputed service tax demand, and whether the estimate and statement issued by the Designated Committee required interference.

Analysis: Section 124(2) of the Finance Act, 2019 mandates deduction of any amount paid as pre-deposit at any stage of appellate proceedings or as deposit during enquiry, investigation, or audit while issuing the statement of amount payable under the Scheme. The Board circulars relied upon clarify that deposits made after issuance of the show cause notice, including amounts paid under protest and amounts not yet appropriated because of pending adjudication, are also to be adjusted while determining the final liability under the Scheme. On the facts, the petitioner produced material showing payment of the disputed amount in relation to the same show cause notice period, and the objection that credit could not be claimed through ST-3 returns was rejected because the Scheme provides its own mechanism for claiming such adjustment. The objection based on the time-bound nature of the Scheme was also addressed by the Board's communication permitting manual processing where the Court directs extension of the benefit.

Conclusion: The petitioner was entitled to have the pre-deposit properly considered for adjustment, and the restrictive credit given by the Designated Committee could not be sustained.

Final Conclusion: The estimation and the statement issued under the Scheme were set aside, and the declaration was directed to be reconsidered for possible issuance of discharge certificate in accordance with the Scheme and the directions contained in the order.

Ratio Decidendi: Under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, pre-deposits and qualifying deposits connected with the same dispute must be deducted while computing the amount payable, and the Scheme's own procedure governs such adjustment.

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