M/S.Brahmananda Sagar Jaggery Industries vs. The Ministry Of Finance

Held

The Court held that the petitioner is entitled to adjust the excess amount deposited in relation to the first show cause notice against the amount payable under the second show cause notice under the SVLDRS scheme. The Court reasoned that the aim of the SVLDRS scheme is to provide amnesty and resolve disputes, and Section 124(1)(a) of the Act, by referring to 'one or more appeals arising out of such notice,' implicitly allows for the consolidation of multiple show cause notices and appeals from the same assessee concerning the same subject matter. The Court found that the respondents' contention that separate cases cannot be clubbed based on Rule 3(2) of the SVLDRS Rules is not a bar to mutual adjustment, especially given the scheme's objectives. The proviso to Section 124(2) prohibits refunds, but this does not preclude adjustment of excess pre-deposits against other liabilities under the scheme. The impugned order was quashed, and the respondents were directed to adjust the excess deposit and issue a discharge certificate for the second case.

Facts

The petitioner, M/s. Brahmananda Sagar Jaggery Industries, engaged in jaggery powder and khandasari sugar production, was issued two show cause notices (SCNs) by the respondents. The first SCN dated 25.08.2016 demanded Rs. 2,96,39,738/- for the period March 2012 to 15.09.2015. The petitioner deposited approximately Rs. 2.96 crores without prejudice. The second SCN dated 06.10.2017 demanded Rs. 1,05,01,926/- for the period 16.09.2015 to 30.06.2017, for which the petitioner deposited Rs. 25,00,000/-. Appeals against the orders confirming these demands were pending. The petitioner sought relief under the Sabka Vishwas (Legacy Dispute Resolution), 2019 (SVLDRS) scheme, intending to adjust excess deposit from the first case against the liability in the second. The respondents issued Form SVLDRS-3 dated 13.12.2019, rejecting the adjustment and demanding further payment for the second case.

Key Issues

1. Whether the petitioner is entitled to adjust the excess amount deposited in relation to the first show cause notice against the amount payable under the second show cause notice under the SVLDRS scheme? (Question of law). The petitioner argued that the SVLDRS scheme, aimed at amnesty and dispute resolution, allows for the consolidation of multiple disputes from the same assessee concerning the same commodity, even if for different periods. They contended that Section 124(1)(a) of the SVLDRS Act, by referring to 'one or more appeals arising out of such notice,' permits clubbing of cases. The respondents contended that Rule 3(2) of the SVLDRS Rules mandates one declaration per case, implying that two separate cases cannot be clubbed for adjustment. They also argued that the proviso to Section 124(2) prohibits refunds of excess pre-deposits.