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Issues:
Seeking refund of tax paid under the Voluntary Disclosure of Income Scheme, 1997 due to a delay in payment beyond the prescribed period. Analysis: The petitioner filed a declaration under the Voluntary Disclosure of Income Scheme, 1997, disclosing income for specific years without filing returns as required by the Income Tax Act. The tax was paid after a delay of one day, leading to the denial of a certificate under the Scheme due to the late payment. The petitioner then requested a refund, which was refused citing Section 70 of the Scheme, which prohibits refunds under any circumstances. The main issue was whether a declarant paying tax beyond the prescribed period is entitled to a refund. The Scheme was created to provide a concessional tax rate and immunity for disclosing concealed income, with specific procedures outlined within it. Section 67(2) of the Scheme states that if tax is not paid within three months of filing a declaration, the declaration is deemed void. The court emphasized that the Scheme requires compliance with its provisions, including timely tax payment. Section 70 of the Scheme states that no tax amount paid under a declaration is refundable under any circumstances. The court interpreted that this provision applies to valid declarations, not void ones due to non-payment within the specified period. Referring to a previous case, the court clarified that Section 70 does not prevent adjustments if a declaration is deemed ineligible. The court held that the Revenue cannot retain tax paid under a void declaration and that such retention is against the Scheme and unconstitutional. Therefore, the petitioner was entitled to a refund of the tax paid under the Scheme. In conclusion, the court allowed the writ petition, directing the respondents to refund the tax paid by the petitioner within two months unless adjusted for any arrears, with no costs incurred.
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