Case Summary
Case Title: The Designated Committee under SVLDRS, 2019 & Anr. v. M/s Navin Housing and Properties Pvt. Ltd.
Court: High Court of Judicature at Madras
Petition Number: W.A. No. 910 of 2020
Date of Judgment: 18.09.2024
Category of Dispute: Adjustment of Pre-deposit under Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019
Relevant Sections: Section 124 & 130 of Finance Act, 2019 (SVLDRS), Section 35F of Central Excise Act, 1944
Facts (Paras 2–12)
The respondent, M/s Navin Housing, received two show cause notices (2008–2010) that overlapped in period, resulting in duplicate demands. Against the first SCN, a pre-deposit of ₹99.94 lakh was made, while the second SCN resulted in an additional confirmed demand of ₹29.16 lakh. The respondent applied under the SVLDRS, 2019 to settle both disputes. The designated committee, however, demanded ₹8.75 lakh under SVLDRS-3 despite the respondent’s claim that an earlier pre-deposit of ₹19.15 lakh already covered this.
Questions of Law (Paras 13–20)
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Can excess pre-deposit from one SCN be adjusted against the liability arising from another SCN under SVLDRS when both cover identical periods and amounts?
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Whether Section 130(2) of Finance Act, 2019 prohibits such adjustment, given that excess pre-deposit cannot be refunded?
Observations (Paras 21–29)
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The Commissioner (Appeals) confirmed duplication of demand to the extent of ₹19.15 lakh.
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Court noted Section 124(2) of Finance Act, 2019 allows deduction of any pre-deposit at any stage of appellate proceedings from the payable amount under SVLDRS.
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Section 130(2) only prohibits refund of excess but does not prevent its adjustment towards another liability.
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Since both SCNs covered identical transactions and periods, fairness demanded recognition of duplication and adjustment.
Judgment (Paras 30–31)
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The Court held that ₹15.80 lakh excess pre-deposit (after adjusting 50% liability under first SCN) could be set off against liability under the second SCN.
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Out of this, ₹8.75 lakh ought to have been adjusted under SVLDRS-3.
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Remaining ₹7.05 lakh was not refundable in terms of Section 124(2).
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Appeal dismissed and Single Judge’s order upholding adjustment was confirmed.
Table: Cases Referred
| Case / Provision | Verdict / Relevance |
|---|---|
| Section 35F, Central Excise Act, 1944 | Pre-deposit is mandatory, but excess can be treated as valid deposit. |
| Section 124(2), Finance Act, 2019 (SVLDRS) | Pre-deposit already paid shall be deducted from payable dues under the scheme. |
| Section 130(2), Finance Act, 2019 (SVLDRS) | No refund allowed of excess amount, but does not bar adjustment. |
Between Fine Lines
For industry, this case clarifies that excess pre-deposits made in earlier proceedings can be adjusted towards SVLDRS dues if demands overlap, ensuring fairness. However, taxpayers cannot seek refund of the balance amount after adjustment due to statutory restrictions.
Disclaimer – “The above summary is for academic purpose only; not formal legal opinion. Seek professional opinion before application. Author or publisher or website shall not be responsible for any usage in any form.”
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