Earlier duty vs penalty deposits under SVLDRS 2019: penalty deposit not adjustable; duty pre-deposits counted, Scheme relief granted with interest.

The dominant issue was whether amounts earlier deposited could be treated as "pre-deposit"/duty for computing "tax dues" under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The HC held that a sum deposited pursuant to a tribunal order, expressly undertaken and paid towards penalty, could not be adjusted against tax dues, whereas amounts deposited towards duty/pre-deposit during appeal/enquiry must be reckoned for the Scheme's computation; since duty dues were within the threshold, only 60% was payable after statutory relief. Given the declarant's bona fide compliance and readiness to pay the balance, the HC exercised Art. 226 and directed acceptance of the amount specified in SVLDRS-3 with 9% interest from 30.06.2020 till payment, and grant of Scheme benefits.

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Issues Involved:
1. Eligibility for benefit under Sabka Vishvas (Legacy Dispute Resolution) Scheme, 2019.
2. Consideration of pre-deposit amounts as tax dues.
3. Technical issues in payment and procedural compliance under the Scheme.

Summary:

Eligibility for Benefit under the Scheme:
The petitioners sought relief under the Sabka Vishvas (Legacy Dispute Resolution) Scheme, 2019, for excise duty arrears. They filed declarations under SVLDRS-1 and SVLDRS-2 forms. The respondents issued Form SVLDRS-3, indicating an additional payment of Rs. 1,22,381/-. The petitioners argued they had already deposited Rs. 24,12,196/- against the tax arrears of Rs. 22,18,148/-, thus not liable for further payment.

Consideration of Pre-Deposit Amounts:
The petitioners contended that Rs. 5,00,000/- deposited under the Appellate Tribunal's order should be considered towards tax dues. The court clarified that Rs. 5,00,000/- was deposited as a penalty, not tax dues, and thus could not be considered under the Scheme. The court referred to Clause 124 of the Scheme, which mandates that pre-deposits during appellate proceedings or inquiries should be deducted from the tax dues but does not include penalty payments.

Technical Issues in Payment:
The petitioners attempted to pay the demanded Rs. 1,22,381/- on the last date of the Scheme, 30.06.2020, but the payment was returned due to an expired CPIN. The court acknowledged the petitioners' bona fide attempt to comply with the Scheme and referred to a similar case, L.G. Chaudhary Vs. Union of India, where procedural technicalities during the COVID-19 pandemic were considered.

Judgment:
The court allowed the petition partly, directing the respondents to accept the payment of Rs. 1,22,318/- along with 9% interest per annum from 30.06.2020 until the payment date. The petitioners were given four weeks to deposit the amount. The court emphasized the Scheme's objective to reduce litigation and granted relief considering the petitioners' bona fide attempt to comply.

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