SVLDR allows mutual adjustment of excess deposits across different periods for same assessee

The Karnataka HC dismissed a writ appeal regarding adjustment of excess deposits under SVLDR. The petitioner sought adjustment of excess amounts deposited for one period against demands for another period. The court held that SVLDR permits mutual adjustment of disputed pre-deposits by the same assessee for different periods relating to the same subject matter, despite separate declarations being required for each period. The court found no specific prohibition against consolidating cases for adjustment purposes. Since the declarant remains the same person across different periods, deposits for one period can be adjusted against demands for another period. The departmental circular supported such adjustments, and the court found no infirmity in the impugned order.

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Issues Involved:
The issues involved in the judgment are the challenge to an order regarding the classification of jaggery powder, imposition of duty, penalty, and seizure by the Central Excise Department, the applicability of "The Sabka Vishwas (Legacy Dispute Resolution) Scheme" for relief and adjustment of excess payment, and the interpretation of SVLDR rules regarding adjustment of excess deposits for different periods.

Classification of Jaggery Powder and Duty Imposition:
The petitioner, a partnership firm manufacturing jaggery powder and khandasari sugar, faced a demand for customs duty based on the Central Excise Department's classification of jaggery powder as cane sugar. The firm contested this classification, but the demand was confirmed by the third respondent, along with penalties imposed on the firm and a partner. The petitioner appealed this order before the tribunal.

Application of "The Sabka Vishwas (Legacy Dispute Resolution) Scheme":
The Ministry of Finance introduced the SVLDR scheme, offering relief and waiver of tax for pending appeals. The petitioner opted for SVLDR, claiming an excess payment of Rs. 1.45 Crore for the period 2011-2015, seeking its adjustment against a second demand for the period 16.09.2015 to 30.06.2017. The petitioner's request for adjustment was rejected, leading to a writ petition and subsequent appeal.

Interpretation of SVLDR Rules and Adjustment of Excess Deposits:
The main argument in the case revolved around whether SVLDR allowed for the adjustment of excess deposits made by the petitioner for one period against the demand for another period. The appellants contended that SVLDR did not permit such adjustments, emphasizing strict construction of fiscal laws. In contrast, the respondent argued that excess pre-deposits for one period could be adjusted against demands for another period, citing circulars and previous court judgments supporting this interpretation.

Judgment and Decision:
After considering the arguments, the court found that SVLDR rules did not provide for refunds but allowed for mutual adjustments of excess deposits for different periods. The court upheld the writ court's decision that mutual adjustment was permissible, as there was no specific bar on consolidating cases and making adjustments. The circular issued by the department clarified that such adjustments were permitted. Consequently, the writ appeal was dismissed, affirming the adjustment of excess deposits made by the petitioner against the demands for different periods.

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