2004 (1) TMI 59 - HC - Income Tax

Benefits of the Kar Vivad Samadhan Scheme, 1998 - CIT declining to issue the certificate contemplated under sub-section (2) of section 90 of the Kar Vivad Samadhan Scheme, 1998 - Such Schemes should be strictly interpreted in terms of the Scheme itself and therefore there is no scope for interpreting any of the provisions of the Scheme Since assessee paid the amount six days beyond the permitted period of thirty days as is required under sub-section (2) of section 90 of the Scheme, Commissioner was justified in declining to issue the certificate

Summary

Issues:
1. Interpretation of the word "shall" in section 90(2) of the Kar Vivad Samadhan Scheme, 1998.
2. Validity of delay in payment under the Scheme.
3. Legal implications of delay in payment under the Scheme.
4. Comparison of different High Court decisions on similar issues.
5. Applicability of Supreme Court judgments in similar cases.
6. Scope of judicial review in matters related to statutory provisions.

Analysis:
1. The petitioner, an assessee under the Income-tax Act, sought benefits under the Kar Vivad Samadhan Scheme, 1998. The issue revolved around the interpretation of the word "shall" in section 90(2) of the Scheme, specifically regarding the timeline for payment.

2. The petitioner argued that a delay of six days in payment was justifiable, citing valid reasons. The contention was that the word "shall" should be interpreted as "may," allowing flexibility in payment timelines. The petitioner relied on various decisions to support this argument.

3. The High Court examined different High Court decisions, including those of Bombay, Punjab and Haryana, Madras, and Madhya Pradesh. It noted conflicting views on the strictness of compliance with payment timelines under similar schemes. The Court emphasized the importance of strict compliance with Scheme provisions to avoid rewriting statutory requirements.

4. The Court discussed the applicability of Supreme Court judgments, particularly the case of Hemalatha Gargya v. CIT, which emphasized strict compliance with Scheme provisions. It distinguished other Supreme Court decisions cited by the petitioner, emphasizing the relevance of Hemalatha Gargya's case to the present matter.

5. The respondent, representing the Income-tax Department, supported the designated authority's decision and cited relevant High Court and Supreme Court judgments. The Court concluded that the petitioner's arguments did not stand in light of the legal principles established by the cited judgments.

6. The Court highlighted the special nature of the Kar Vivad Samadhan Scheme and the need for strict interpretation of its provisions. It rejected the petitioner's request for a writ of certiorari or mandamus, stating that the designated authority had acted in accordance with statutory provisions. The Court emphasized that statutory functionaries cannot be directed to act beyond the scope of the law.

In conclusion, the Court dismissed the writ petition, upholding the decision of the designated authority and emphasizing the importance of strict compliance with the Kar Vivad Samadhan Scheme provisions.