Refund of pre-deposit cannot be denied under Sabka Vishwas where the claim is independent of the settlement scheme.

Refund of a pre-deposit made in compliance with appellate directions could not be denied merely because the assessee later opted for the Sabka Vishwas Dispute Resolution Scheme. The amount was accepted by the Revenue, and Section 130(2) of the Finance Act, 2019 was found inapplicable to a refund claim that was not made under the settlement scheme. The scheme was intended to resolve disputes, not to defeat an otherwise eligible refund arising from bona fide litigation, so the denial of refund was set aside.

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Issues: Whether refund of the pre-deposit of Rs. 10 lakhs, made pursuant to CESTAT directions, could be denied by invoking Section 130(2) of the Finance Act, 2019 on the ground that the assessee later opted for settlement under the Sabka Vishwas Dispute Resolution Scheme.

Analysis: The refund claim related to a pre-deposit made in compliance with appellate directions and was not a claim for refund under the settlement scheme. The amount had been accepted by the Revenue, and the subsequent reliance on Section 130(2) to deny refund was found to be misplaced. The scheme was intended to settle the dispute and could not be used to deprive a bona fide litigant of an otherwise eligible refund. The authorities were found to have misdirected themselves in treating the provision as a bar to the refund claim.

Conclusion: Section 130(2) of the Finance Act, 2019 was held inapplicable to the assessee's refund claim, and the denial of refund was set aside.

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