Refund of Scheme Deposits: money collected without authority of law cannot be retained when no liability survives.

Amounts deposited under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 may be refundable where a departmental appeal ought to have been withdrawn under the binding litigation policy and no liability survived against the assessee. The article states that a deposit made after issuance of Form No. 3 cannot be treated as duty in arrears or as an amount actually payable if the underlying demand has ceased in substance. It further notes that a statutory bar on refund does not protect retention of money collected without authority of law, and that writ relief may be available where the demand and retention are without jurisdiction and no effective alternate remedy exists.

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Issues: Whether the amount deposited under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 was liable to be refunded when the departmental appeal was required to be withdrawn under the binding litigation policy and no dues survived against the assessee.

Analysis: The amount was deposited only because the designated committee processed the declaration and issued Form No. 3 even though, by virtue of the CBIC instructions on the enhanced monetary limit for departmental appeals, the pending appeal ought not to have continued. The demand raised under the scheme was therefore examined in the context of whether any amount was actually due, payable, or in arrears. The Court held that once the departmental appeal was meant to be withdrawn, the liability had ceased in substance, and the amount could not be treated as an amount in arrears or as duty payable under the statutory definitions. The bar against refund under the scheme could not validate retention of money collected without authority, especially in view of the constitutional mandate that tax can be collected only by authority of law. The writ petition was held maintainable because the demand and retention of money were without jurisdiction and no alternate effective remedy was shown.

Conclusion: The refund claim was held maintainable and the amount deposited under the scheme was directed to be returned to the assessee.

Final Conclusion: The Court held that the revenue could not retain money collected without legal authority merely because it had been deposited under the settlement scheme, and the assessee was entitled to restitution of the amount.

Ratio Decidendi: Money collected without authority of law cannot be retained or protected by a statutory refund bar where the underlying liability has ceased and no amount is actually due.

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