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Issues: Whether the pre-deposit of Rs. 20 lakhs made pursuant to the Tribunal's interim order was required to be reckoned while issuing the declaration under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, and whether the Designated Committee could refuse relief or treat itself as functus officio after the scheme period had ended.
Analysis: The appellant had filed the declaration while the appeal was pending and had specifically pointed out, in the rectification process under Section 127 of the Finance (No. 2) Act, 2019 read with Rule 6 of the Sabka Vishwas (Legacy Dispute Resolution) Scheme Rules, 2019, that the pre-deposit made as a condition for stay before the Tribunal was entitled to credit under Section 124(2). The materials were placed before the Designated Committee, yet the amount continued to be shown as zero and no reasoned order was communicated. The Court held that the scheme must receive a purposive construction to advance settlement, that the circulars issued by the department themselves clarified adjustment of pre-deposits, and that the impugned demand and refusal reflected total non-application of mind. The Court further held that the closing of the scheme did not bar consideration of a declaration already lodged and pursued before the cut-off date, and that the Designated Committee was not functus officio in respect of such pending declaration.
Conclusion: The pre-deposit had to be given credit, the Form SVLDRS 3 could not stand as issued, and the appellant was entitled to a fresh Form SVLDRS 3 with the pre-deposit reckoned. The challenge was therefore decided in favour of the assessee.
Final Conclusion: The impugned order was set aside and the Designated Committee was directed to redo the declaration by giving credit for the pre-deposit and to issue a fresh Form SVLDRS 3.
Ratio Decidendi: Under the settlement scheme, a pre-deposit made in appellate proceedings must be adjusted while determining the amount payable, and a declaration already made and pending consideration cannot be defeated merely because the scheme period has closed if the authority failed to act on it with reasons and in accordance with the statutory procedure.
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