Declarant's Prior Tax Deposits Cannot Be Set Off Against Declared Dues in Voluntary Disclosure Category, Rules Rajasthan High Court
In a significant ruling delivered on August 11, 2026, the Rajasthan High Court (Jaipur Bench) has dismissed petitions filed by M/s Greens And Grows and M/s Greens And Grows Infra Developers LLP challenging the rejection of their tax adjustment claims under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The bench comprising Justices Arun Monga and Ashutosh Kumar clarified that declarants opting for the voluntary disclosure category cannot adjust amounts previously deposited against their declared tax dues.
The petitioners had voluntarily disclosed service tax liabilities amounting to Rs. 32,18,746 for the financial years 2014 to 2017 through Form SVLDRS-1. They also claimed that they had already deposited Rs. 19,90,803 and sought to set this amount off against their declared dues, contending that this should reduce their payable liability.
However, the designated committee under the Scheme, after due consideration and a personal hearing, rejected this claim stating that under the Scheme's statutory provisions, particularly Section 123(d) of the Finance (No. 2) Act, 2019, tax dues in the voluntary disclosure category mean the total amount declared by the petitioner without any deduction for prior payments.
The Court analyzed the relevant statutory framework and observed that the Scheme explicitly defines tax dues for voluntary disclosure as the total amount stated by the declarant, and does not permit adjustment of any prior deposits. Further, Section 124(2), which allows deduction of pre-deposits made during appellate proceedings or investigations, was found inapplicable since the payment made by the petitioner was a voluntary deposit against running liability and not under any compulsion of appellate or investigatory proceedings.
The Court also rejected the petitioner's contention that the Scheme's circulars mandated a liberal approach allowing such deductions, clarifying that these circulars do not override or modify the clear statutory mandate that a voluntary disclosure's tax dues are the declared total amount.
Importantly, the Court found that the petitioner was afforded a proper opportunity to be heard before the committee, including a personal hearing where the petitioner's representatives argued their case. The claim of denial of hearing was thus held to be unsubstantiated.
The judgment emphasizes the principle that a declarant under the voluntary disclosure category cannot later seek to amend or reduce the declared dues by claiming prior payments. The Scheme's electronic platform and statutory provisions bind the declared figure as conclusive and not subject to verification or reduction.
The writ petitions were dismissed, but the Court allowed the petitioners liberty to explore other legal remedies or future amnesty schemes as may be applicable. This ruling brings clarity on the interpretation of voluntary disclosure under the Sabka Vishwas Scheme, reinforcing the importance of accurate and final declarations by taxpayers.
Bottom Line:
Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 - Declarant under voluntary disclosure category cannot have prior deposits adjusted against declared tax dues.
Statutory provision(s):
Finance (No. 2) Act, 2019 Chapter V Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 Sections 123(d), 124(1)(e), 124(2), 125(1)(f), 126, 127; Constitution of India Article 226
M/s. Greens And Grows v. Union of India, (Rajasthan)(DB)(Jaipur Bench) : Law Finder Doc Id # 2978384
