SVLDRS 2019 settlement: credit for investigation deposits paid as interest/penalty must reduce final payable amount u/s124(2)

The dominant issue was whether amounts deposited during investigation under the heads of interest and penalty must be adjusted while determining the amount payable under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The HC held that s.124(2) is mandatory and requires deduction of "any amount" paid as deposit during enquiry/investigation/audit, irrespective of whether it was paid as tax, interest, or penalty; reliance was placed on a prior HC decision that had attained finality. The Designated Committee's refusal to grant credit was therefore legally unsustainable, and the SVLDRS-3 statement was quashed with consequential relief to the declarant.

---

---

Issues involved:
Petitioner seeking writ to quash a portion of the Impugned statement under Sabka Vikas Scheme, 2019 for non-adjustment of deposited amount. Interpretation of Section 124 of Finance Act for relief calculation under the scheme.

Analysis:
The petitioner, a company, filed a writ petition to challenge the Designated Committee's decision not to adjust the amount deposited during an investigation under the Sabka Vikas Scheme, 2019. The Division Bench judgment in Schlumberger Solutions Pvt. Ltd's case was referred to, where the relief calculation under Section 124 of the Finance Act was discussed. The Court allowed the petition, emphasizing the provision's language regarding deductions from amounts paid during investigation, regardless of the specific head under which the amount was deposited. The Court highlighted that any amount paid during investigation must be deducted when determining the final payable amount by the declarant.

The Designated Committee's decision not to adjust the interest amount already deposited by the petitioner was challenged. The Court noted that the relief calculation provision did not differentiate between amounts paid under various heads, emphasizing that the petitioner should not be penalized for depositing amounts under different categories. The Court highlighted the mandatory nature of Section 124(2) of the Finance Act, requiring deductions for amounts paid during investigation when issuing the final statement.

In response to the respondent's submissions, the Court noted that the Designated Committee's calculation was based on the scheme's provisions, which did not allow for adjustment of amounts paid specifically against interest. The Court reiterated the Schlumberger Solutions Pvt. Ltd's case interpretation of Section 124 of the Finance Act, emphasizing the mandatory deduction requirement for amounts paid during investigation. As the department did not appeal the previous judgment, it had attained finality.

Consequently, the Court allowed the writ petition, quashing the Designated Committee's statement and directing a re-consideration of the petitioner's claim within four weeks, with adjustments for amounts paid towards interest and penalty. The petitioner was instructed to make the payment accordingly within four weeks of the revised statement issuance, resolving the main case and any pending miscellaneous applications.

---