2019 (7) TMI 57 - HC - Central Excise

Settlement under the Kar Vivad Samadhan Scheme, 1998 - Section 90(2) of the Finance Act, 1998 - It is the petitioners' contention that payment to be made within 30 days from the date of the passing of the order passed by the designated authority, should be read as within 30 days from the date of the receipt of the order passed by the designated authority - HELD THAT - Section 90(2) of the Finance Act, 1998 as it stood at the relevant time required the act of depositing the amount determined by the designated authority within 30 days of the passing of the order. In the present facts, section 90(2) of the Finance Act, 1998 was amended on 12/05/2000 by the Finance Act, 2000 with retrospective effect from 01/09/1998. The amendment was to substitute the words within 30 days from passing of an order with the words within 30 days from the receipt of the order passed by the designated authority . The amended Act provided that the substituted provision of section 90(2) shall be deemed to have been substituted with effect from 01/09/1998. In view of the above retrospective amendment, the petitioners challenge to the constitutional validity of section 90(2) of the Finance Act, 1998 does not survive - the period of 30 days has to be computed not from the date of the passing of the order by the designated authority on 15/02/1999, but the period of 30 days has to be computed from the date of the receipt of the order/certificate dtd.15/02/1999. The respondent No. 2 designated authority is directed to issue a final certificate under section 90(2) read with section 91 of the Samadhan Scheme - petition allowed.

Summary

Issues:
Challenge to rejection of application for settlement under Kar Vivad Samadhan Scheme, 1998; Constitutional validity of Section 90(2) of the said Scheme.

Detailed Analysis:

1. Challenge to Rejection of Application: The petitioners challenged the rejection of their application for settlement under the Kar Vivad Samadhan Scheme, 1998. The petitioners sought relief under Article 226 of the Constitution of India, questioning the rejection of their application. They also prayed for striking down Section 90(2) of the Scheme, claiming it to be arbitrary and violative of the Constitution.

2. Interpretation of Section 90(2): The main issue revolved around the interpretation of Section 90(2) of the Finance Act, 1998, as applied by the designated officer. The provision required the declarant to pay the determined sum within 30 days of the passing of an order by the designated authority. The petitioners contended that the payment should be made within 30 days from the receipt of the order, not from the passing date.

3. Precedent and Interpretation: The Gujarat High Court's decision in a similar case was cited, where it was held that the period for taking action from the date of the decision should be construed as the date of receipt of the order. This interpretation was supported by a Supreme Court decision in a different context, emphasizing the practicality and effectiveness of availing remedies provided by the law.

4. Retrospective Amendment: The Finance Act, 2000, retrospectively amended Section 90(2) of the Finance Act, 1998, changing the wording to "within 30 days from the receipt of the order passed by the designated authority." This retrospective amendment rendered the petitioners' challenge to the constitutional validity of Section 90(2) moot.

5. Final Decision: Considering the retrospective amendment, the court directed the designated authority to issue a final certificate under Section 90(2) of the Samadhan Scheme. Additionally, the recovery notices issued by the Deputy Commissioner of Central Excise were quashed and set aside, as the petitioners had complied with the revised timeline for payment.

In conclusion, the petition was allowed in favor of the petitioners based on the interpretation of the amended Section 90(2) of the Finance Act, 1998, and the subsequent compliance by the petitioners within the revised timeline.