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2002 (4) TMI 17 - HC - Income TaxKVSS - The petitioner-assessee has approached this court invoking its extraordinary jurisdiction to quash and set aside the communications and for seeking declaration that the petitioner has made payment in time and is entitled to the benefit of the Kar Vivad Samadhan Scheme 1998 and for directions to the respondents to issue necessary certificate in that behalf. - We having come to the conclusion that the petitioner discharged their liability by making the payment of the sum of Rs. 2, 11, 021 in terms of the certificate of intimation under section 90(1) of the Finance (No.2) Act 1998 is entitled to the benefit of the Kar Vivad Samadhan Scheme 1998 and therefore the impugned communications issued by the respondents are quashed and set aside.
Issues:
1. Interpretation of the "Kar Vivad Samadhan Scheme, 1998" regarding the timeline for payment. 2. Whether payment made by cheque within the stipulated time frame qualifies for the scheme's benefits. 3. Legal implications of cheque payment in the context of the scheme's provisions. Issue 1: Interpretation of the "Kar Vivad Samadhan Scheme, 1998" regarding the timeline for payment: The petitioner, engaged in manufacturing and trading, contested the communication dated August 10, 1999, from the respondents denying them the benefit of the scheme due to payment made on the 31st day instead of within the stipulated 30-day period. The scheme required payment within 30 days from the date of the order, raising the question of adherence to the timeline for availing benefits under the scheme. Issue 2: Whether payment made by cheque within the stipulated time frame qualifies for the scheme's benefits: The petitioner argued that the payment made by cheque on February 10, 1999, should be considered within the 30-day limit as the cheque's delivery date should be deemed the payment date. The respondents contended that the actual receipt of funds by them on February 13, 1999, beyond the 30-day period, disqualified the petitioner from the scheme's benefits. Issue 3: Legal implications of cheque payment in the context of the scheme's provisions: The court examined legal precedents to determine the validity of cheque payment within the scheme's timeline. Referring to cases like Kirloskar Brothers Ltd. v. CIT and CIT v. Ogale Glass Works Ltd., the court established that payment by cheque relates back to the cheque's delivery date, not the encashment date. The court reaffirmed that unless a cheque is dishonored, it constitutes payment, with the payment date being the cheque delivery date. The court upheld that the petitioner's cheque payment on February 10, 1999, was within the scheme's prescribed time limit, entitling them to the scheme's benefits. In conclusion, the court ruled in favor of the petitioner, holding that the payment made by cheque on February 10, 1999, was within the stipulated 30-day period under the "Kar Vivad Samadhan Scheme, 1998." The court quashed the communications from the respondents denying the petitioner the scheme's benefits and directed the issuance of a necessary certificate to the petitioner. The judgment emphasized that cheque payment, if not dishonored, constitutes valid payment, with the payment date being the cheque delivery date, aligning with legal precedents and ensuring the petitioner's entitlement to the scheme's benefits.
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