Amnesty Scheme settlement: prior tax remittances during pending litigation were credited and treated as full discharge of liability.

Arrears paid during pendency of KGST litigation under interim protection could be treated as provisional and reckoned under the Amnesty Scheme, 2020, because the scheme contemplated credit for prior remittances and the Department's adjustment under Section 55C did not conclusively exclude them. The Court further held that, where the prior remittances exceeded the amnesty liability for the relevant assessment years, the tax, interest and penalty dues stood fully and finally settled under the Scheme, and the amount paid under the later interim order was refundable.

---

---

Issues: (i) whether the payments made by the assessee towards the disputed KGST arrears during the pendency of the earlier litigation were to be treated as provisional and capable of being reckoned under the Amnesty Scheme, 2020, notwithstanding the Department's adjustment under Section 55C; (ii) whether the assessee was entitled to have its liability for the assessment years 1998-99 to 2004-05 and 2015-16 treated as finally settled under the Amnesty Scheme, 2020, with consequential refund of the amount paid under the interim order in the later writ petition.

Issue (i): Whether the payments made by the assessee towards the disputed KGST arrears during the pendency of the earlier litigation were to be treated as provisional and capable of being reckoned under the Amnesty Scheme, 2020, notwithstanding the Department's adjustment under Section 55C.

Analysis: The earlier and later proceedings were pending under interim protection, and the amounts remitted by the assessee were made in the backdrop of unresolved challenges to the Department's computation. The subsequent Amnesty Scheme, 2020 expressly permitted settlement of arrears for the relevant periods on beneficial terms and contemplated credit for prior remittances. In that setting, the earlier payments could not be treated as conclusively appropriated against the assessee's liability so as to exclude them from the later settlement exercise.

Conclusion: The payments were rightly treated as provisional and liable to be reckoned for settlement under the Amnesty Scheme, 2020.

Issue (ii): Whether the assessee was entitled to have its liability for the assessment years 1998-99 to 2004-05 and 2015-16 treated as finally settled under the Amnesty Scheme, 2020, with consequential refund of the amount paid under the interim order in the later writ petition.

Analysis: The Scheme being beneficial in nature, the Court compared the amount already remitted by the assessee with the amount payable under the Amnesty Scheme, 2020 and found that the remittances exceeded the computed amnesty liability. The Court therefore concluded that the past remittances should be accepted in full and final discharge of the tax, interest and penalty liability for the relevant years. The amount paid pursuant to the interim order in the later writ petition was also directed to be returned.

Conclusion: The assessee's liability stood finally settled under the Amnesty Scheme, 2020, and the assessee was entitled to refund of the amount paid under the interim order.

Final Conclusion: The connected writ appeal, review petition and writ petition were disposed of by granting the assessee the benefit of the Amnesty Scheme, 2020, treating the earlier remittances as final settlement of the arrears for the relevant assessment years and directing refund of the interim payment.

Ratio Decidendi: Where arrears are paid during pendency of tax litigation under interim protection and a later beneficial amnesty scheme expressly permits settlement of the same arrears, such earlier payments may be treated as provisional and adjusted towards the amnesty liability, leading to full and final settlement if the remittances cover the computed amount.

---