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TMI Blog2014 (9) TMI 886X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal was pending before the Tribunal. Therefore, the petitioner submitted an application in the prescribed form, claiming benefit thereunder. It was mentioned that the disputed arrears vis--vis the petitioner comprised of tax of Rs. 1,05,977/-, interest of Rs. 53,593/- and penalty of Rs. 4,50,000/-. He offered to pay 30% of the disputed tax, in terms of the Scheme. The competent authority i.e., 1st respondent however passed a proforma order, dated 02.02.1999, requiring the petitioner to pay a sum of Rs. 3,04,483/-. The difference mainly arose on account of the levy of 35% amount on the component of interest and penalty. The petitioner challenges the order, dated 02.02.1999. He contends that though an application was filed in the prescribed form, and the stipulated amount was paid, the 1st respondent passed the impugned order, contrary to the provisions of the Scheme. The 1st respondent filed a counter affidavit opposing the writ petition. According to him, the petitioner is under obligation to pay the amount at 50% of the arrears of taxm, under Clause (a)(iv) of Section 88 of the Finance Act, 1998 (for short the Act). It was also stated that when doubt arose in this behalf, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat enactment in respect of an assessment year as modified in consequence of giving effect to an appellate order but remaining unpaid on the date of declaration; (Clause (ii) is omitted since it relates to the indirect tax enactments.) The salient features of the Act is that irrespective of the nature or merits of the claim, an assessee is given the option to pay the stipulated percentage of the disputed amount, to give a quietus to the litigation. One of the conditions is that the proceedings in relation to the dispute must be pending before an authority under the Act, or the Court. There is no controversy in this case as to the applicability of the Scheme, since the appeal preferred by the petitioner was very much pending before the Tribunal. The Scheme maintains a distinction between the assessees, who are individuals, on the one hand, and the assessees, that are companies, firms etc. on the other hand. For the individual assessees, the amount payable is 30% of the disputed income and for the corporate assessees, it is 35%. The entire controversy in this case turns around the question as to whether it fits into Clause (a)(iii), or Clause (a)(iv) of Section 88 of the Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1BB, 271C, 271D, 271E, 271F, 272A, 272AA, 272BB etc. We are of the view that the approach of the 1st respondent is not correct. Once the case falls under Clause (a)(iii) of Section 88 of the Act, the amount is payable at 30% of the disputed income. The word disputed income is defined under clause (e) of Section 87 of the Act as under: (e) disputed income, in relation to an assessment year means the whole or so much of the total income as is relatable to the disputed tax. To determine this, one has to fall back upon the disputed tax, which, in the instant case is Rs. 1,05,977/-. If this figure is multiplied by 100/40, the figure representing the disputed income would emerge, being Rs. 2,64,940/-. An analysis of Clauses (a)(iii) and (a)(iv) of Section 88 of the Act would present some extraordinary features. A person, who is in arrears of tax, is exposed to higher obligation, whereas the one, who is in arrears of tax, interest and penalty, is relieved of a substantial obligation. That, however was the intention of the Parliament and the Courts or for that matter, the respondents cannot look into the reasons. The clarification issued by the Board, in a way adds some more dimension ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only he was found within the vicinity, and not when he entered the same. The contention was repelled and the person was punished. This, notwithstanding the fact that the provisions of a criminal law must be construed strictly and no act or omission can be treated as crime, unless ordained by the competent legislature. Acceptance of the contention of the accused therein would have resulted to absurd situations. In R. v Baker, Section 23(2) of the Firearms Act, 1937 fell for consideration. It provided for punishment of imprisonment of 7 years, if a person is arrested on suspicion of having committed schedule offence, i.e. possessing a firearm, whereas the punishment for a person found to be in possession of firearm is, imprisonment for 2 years. The Court took the view that the literal interpretation of the provision would lead to absurdities and removed the same. Bennion in his Treatise on Statutory Interpretation has this to say, Common sense This section of the Code deals with an aspect of the principle that Parliament is taken to expect its Acts to be applied with common sense. According to Lord Simon of Glaisdale: a court would only be justified in departing from the plain wor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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