Legacy dispute scheme adjustment requires crediting pre-notice interest payments while computing relief under the settlement framework.

Section 124(2) of the Finance Act, 2019 was applied to hold that any amount paid as pre-deposit or deposit during enquiry, investigation or audit must be adjusted under the Sabka Vikas (Legacy Dispute Resolution) Scheme, 2019, and the provision is not confined to tax alone. Interpreting the Scheme as a beneficial settlement measure, the court held that amounts paid under protest towards interest before the show cause notice were also liable to be credited while computing relief. Form SVLDRS-3 was therefore unsustainable to the extent it failed to account for that adjustment.

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Issues: Whether the amount paid under protest towards interest before issuance of the show cause notice was required to be adjusted as pre-deposit while computing relief under the Sabka Vikas (Legacy Dispute Resolution) Scheme, 2019.

Analysis: Section 124(2) of the Finance Act, 2019 provides that relief under the Scheme is subject to deduction of any amount paid as pre-deposit at any stage of appellate proceedings or as deposit during enquiry, investigation, or audit. The provision uses the expression "any amount paid" and does not distinguish between tax, interest, or penalty. The Scheme being a beneficial one intended to settle legacy disputes, it must receive a construction that advances its object. The amount already paid by the declarant towards interest was therefore liable to be adjusted while determining the amount payable under the Scheme.

Conclusion: The amount paid towards interest was required to be credited and adjusted while issuing the declaration statement, and the impugned Form SVLDRS-3 could not be sustained to the extent it ignored that adjustment.

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