Tax settlement waiver applies to the full disputed amount; pre-deposits are adjusted afterwards, not deducted first.

Waiver under Section 3 of the settlement Act must be applied to the full disputed tax amount, with any pre-deposit or conditional stay adjusted afterwards. The court applied statutory definitions distinguishing admitted tax from disputed amount and held that deducting interim pre-deposits before calculating the waiver produces a less favourable result and defeats the Scheme's beneficial purpose; therefore settlement calculated after first reducing the disputed amount by pre-deposit was incorrect. The impugned settlements are to be recalculated by applying the waiver to the disputed amount, adjusting the pre-deposit thereafter, and refunding any excess with interest.

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Issues: Whether, for computation of settlement amount under the Jharkhand Karadhan Adhiniyamon Ki Bakaya Rashi Ka Samadhan Act, 2022, the amount deposited as pre-deposit/conditional stay should be first deducted from the disputed amount before applying the waiver under Section 3, or whether waiver must be applied on the full disputed amount and the pre-deposit adjusted thereafter.

Analysis: The definitions in Section 2(i) and Section 2(viii) distinguish 'admitted tax' (amount admitted as payable in returns) from 'disputed amount' (amount determined payable by assessment/reassessment and not admitted, in respect of which litigation is pending). Section 3 prescribes settlement amounts as percentages of the tax component of assessed tax or unpaid tax in dispute (60%/50% waivers in relevant categories) and contemplates deduction of amounts already paid for purposes of calculating settlement only in specific contexts set out in the Table and provisos. Applying the statutory definitions and the structure of Section 3, computing waiver on a reduced disputed amount by first deducting pre-deposits results in a less favourable position for an assessee who has made interim payments, contrary to the beneficial object of the Scheme. Comparative reasoning and precedent interpreting analogous amnesty provisions support treating waiver as applicable to the full disputed amount and then adjusting any pre-deposit so as not to penalize voluntary or contested interim payments.

Conclusion: The settlement computation in which the pre-deposit was first deducted from the disputed amount before applying the waiver under Section 3 is incorrect. The orders setting aside the settlement benefit on that basis are to be quashed, the settlement recalculated applying the waiver on the disputed amount and thereafter adjusting the pre-deposit, and the excess amount realized (Rs. 10,51,37,934.60) is to be refunded with interest at 6% per annum from the date of deposit until refund.

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