1998 (12) TMI 65 - HC - Income Tax

Summary

Issues:
1. Recovery of income tax by attaching bank account.
2. Petitioner's eligibility for the Kar Vivad Samadhan Scheme, 1998.

Analysis:

1. Recovery of income tax by attaching bank account:
The petitioner, a state corporation, faced a substantial income tax liability for assessment years 1991-92, 1993-94, and 1994-95. The Income-tax Department recovered Rs. 3,34,35,490 by attaching the petitioner's bank account. The petitioner sought a refund of this amount and requested to be treated as a defaulter for availing benefits under the Kar Vivad Samadhan Scheme, 1998. The court held that the tax recovery by the Department was legally justified, denying the refund request. However, the court analyzed the definition of "tax arrear" under the scheme and concluded that the petitioner, despite having paid the tax before the scheme's inception, was still eligible to avail of the scheme's benefits due to specific conditions not being met for the payment made.

2. Petitioner's eligibility for the Kar Vivad Samadhan Scheme, 1998:
The court examined the definition of "tax arrear" under the Kar Vivad Samadhan Scheme, 1998, to determine the petitioner's eligibility for the scheme. Despite the petitioner having paid the tax amount before the scheme's commencement, the court ruled that the petitioner could still be considered in arrears of tax as per the scheme's provisions. The court clarified that the petitioner had not met the specific conditions outlined in the scheme for the payment made, thereby entitling the petitioner to avail of the scheme's benefits. Consequently, the court disposed of the petition, allowing the petitioner to benefit from the Kar Vivad Samadhan Scheme, 1998.

This judgment highlights the court's interpretation of the tax arrear definition under the Kar Vivad Samadhan Scheme, 1998, and its implications on the petitioner's eligibility for the scheme despite prior tax payments.