High Court Quashes Form SVLDRS-3 and Directs Correct Reassessment Under Sabka Vishwas Scheme
In a significant ruling, the Bombay High Court has ruled in favor of M/s. Unique Enterprises, a manufacturer of condensers and cooling coils, granting them relief under the Litigation category of the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019. The Court quashed Form SVLDRS-3 issued by the Respondents, which had wrongly categorized the tax dues under the "Arrears" category, demanding Rs.12,93,408 from the petitioner.
The division bench comprising Justices M.S. Sonak and Advait M. Sethna delivered the judgment on December 2, 2025, in response to a writ petition filed by M/s. Unique Enterprises challenging the demand under the Arrears category. The petitioner argued that their case should fall under the Litigation category, entitling them to a 70% relief on the tax dues as per Section 124(1)(a) of the Finance Act, 2019.
The High Court, after examining the factual matrix, observed that the quantification of duty and penalty was pending adjudication as of June 30, 2019, due to remand orders from the Tribunal. Therefore, the case qualified for the Litigation category rather than the Arrears category. The Court also noted that the petitioner had made a pre-deposit of Rs.10 lakhs, which the Respondents had adjusted previously, reinforcing the petitioner's claim.
The Court's judgment provides much-needed clarity on the application of the Sabka Vishwas Scheme, emphasizing the distinction between the Litigation and Arrears categories. The Court directed the Respondents to reassess the tax dues, considering the petitioner's declaration under the Litigation category, and complete this exercise within two months.
The ruling is expected to have wider implications for similar cases pending under the Sabka Vishwas Scheme, offering a precedent for entities seeking relief under the Litigation category.
Bottom Line:
Under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, a case would fall under the "Litigation" category when the amount of tax/duty has not been confirmed and has not attained finality as of 30 June 2019. The quantification issue of duty and penalty, when pending re-adjudication, would preclude the application of the "Arrears" category.
Statutory provision(s): Article 226 of the Constitution of India, Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019, Finance Act, 2019, Section 124(1)(a), Section 124(1)(c), Section 124(2).
M/s. Unique Enterprises v. Union of India, (Bombay)(DB) : Law Finder Doc Id # 2816419
