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TMI Blog2015 (8) TMI 242X X X X Extracts X X X X X X X X Extracts X X X X ..... contained in Section 95(ii)(b) would not be attracted – Impugned judgment of High Court was erroneous and warrants to be set aside – Appellants shall be entitled to benefit of Kar Vivad Samadhan Scheme – Decided in favour of Appellant. - Civil Appeal No. 7570 of 2004, Civil Appeal No. 7571 of 2004 - - - Dated:- 4-8-2015 - A. K. Sikri And Rohinton Fali Nariman,JJ. For the Appellant : Ms. Ruby Singh Ahuja, Adv. Mr. Ashok Kumar Juneja, Adv. Mr. Chand Qureshi, Adv. Mr. R. N. Keshwani, Adv. For the Respondent : Mr. Sanjai Kumar Pathak, Adv.for Mr. B. Krishna Prasad, Adv. JUDGMENT A. K. Sikri, J. The question of law which arises in these two appeals is identical which concerns the interpretation that is to be accorded to the provisions of Kar Vivad Samadhan Scheme (for short, the 'Scheme') that was introduced under Chapter IV of the Finance (No.2) Act of 1998 (hereinafter referred to as the '1998 Act') and is contained in Sections 86 to 98 of the said Act. In particular, it is Section 95(ii)(b) of the 1998 Act that becomes the focus of the issue and the meaning that is to be assigned to the said clause would be the determinative of the outcome ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue in the case of M/s. Amar Steel Industries. 6) During the pendency of the appeal, the Union of India introduced the Scheme contained in Sections 86 to 98 of the 1998 Act. The Scheme provides for settlement of disputes relating to tax arrears both for direct taxes and indirect taxes. So far as indirect tax is concerned, Section 87(m)(iii) of the 1998 Act defines 'tax arrear' in respect of which the Scheme was to be applied. It reads as follows: (a) the amount of duties (including drawback of duty, credit of duty or any amount representing duty), cesses, interest fine or penalty determined as due or payable under that enactment as on the 31st day of March, 1998 but remaining unpaid as on the date of making a declaration under section 88; or (b) the amount of duties (including drawback of duty, credit of duty or any amount representing duty), cesses, interest, fine or penalty which constitutes the subject matter of a demand notice or a show-cause notice issued on or before the 31 st day of March 1998 under the enactment but remaining unpaid on the date of making a declaration under section 88, but does not include any demand relating to erroneous refund and wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed intra-court appeal before the Division Bench questioning the validity of the judgment of the learned Single Judge. In this appeal, the Revenue has succeeded as the Division Bench has reversed the order of the Single Judge by means of its judgment dated August 28, 2003 resulting in dismissal of the writ petition of the appellants and affirming the order of the designated authority rejecting the declaration of the appellants holding that the appellants were not entitled to take the benefit of the Scheme under Section 95(ii) of the 1998 Act. The Division Bench has gone a step further in rendering the impugned judgment as according to it the declaration filed by the appellants was not only hit by clause (b) but clause (c) of Section 95(ii) as well. It has held that neither clause (b) or (c) of Section 95(ii) of the 1998 Act is attracted inasmuch as there was no show-cause notice or notice of demand issued in the instant case. Further, no appeal or reference or writ petition of the respondent was admitted or pending before any authority mentioned in clause (c) above. This is how the matter has landed up in this Court. 11) From the facts noted above, it is clear that on the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ithin a period of one year from the relevant date, appropriate officer is competent to serve a notice on the person chargeable with the duty or interest which has not been so levied or which has been short levied or short paid or to whom the refund is has erroneously been made, requiring him to show-cause why he should not pay the amount specified in the notice. Therefore, the contingency of issuing show-cause notice under this provision would arise where the duty has not been paid either on the ground that it was not levied at all or was short levied. Another reason for invoking the provision would be where duty has been erroneously refunded. Such a situation did not arise in the instant case. Moreover, we have to examine the mater in the light of the provision of this Scheme. In this context, we would like to refer to the judgment of this Court in Union of India v. Nitdip Textiles Processors (2012) 1 SCC 226 wherein it is held that under the following circumstances the amount payable shall be treated as 'tax arrears': (i) where tax arrears are quantified but not paid as on 31.03.1998, and (ii) where a demand or show-cause notice has been issued before 31.03.1998. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the instant case, after the endorsement on Bill of Entry, it was admittedly served upon the appellants in the manner specified under Section 153. 16) In Renuka Datla (Dr.) v. Commissioner of Income Tax, Karnataka (2003) 2 SCC 19, this Court widely interpreted the term 'total tax determined and payable' appearing in Section 87(f) of the Scheme holding that no particular process of determination is contemplated. It has to be held that on principle, same meaning is to be accorded to the term 'determined as due or payable' in Section 87(m)(ii)(a) of the Scheme. 17) There is another manner of looking into the matter. Immediately after receiving the Bill of Entry with the endorsement to pay the amount of 52,20,000, the appellants filed the writ petition in the High Court disputing the same with the contention that it was not payable. Obviously, it was a demand raised by way of endorsement on the Bill of Entry that prompted the appellants to challenge the same by filing the writ petition. The Revenue never took the plea that the case was premature in the sense that no demand had been crystallized in the absence of show-cause notice or adjudication order and, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue's appeal in the case of M/s. Amar Steel Industries. Admittedly, the appeal of M/s. Amar Steel Industries, was still pending before the Division Bench when the Scheme was promulgated by the Legislature and the declaration was filed by the appellants. The said assessee has subsequently been permitted to avail of the Scheme. Therefore, prima facie it appears that mischief of clause (c) is not attracted. In any case it is not necessary to go into this aspect in detail, for another simple reason it needs to be remarked that the Revenue had not rejected the declarations filed by the appellants on this ground. It is the Division Bench of the High Court, in the impugned judgment, which has held against the appellants on this account. It is also very pertinent to point out that in the counter affidavit filed by the Revenue in the instant appeal, the Revenue appears to have given up this contention as the impugned order of the High Court is not defended on this ground at all. 22) The aforesaid discussion leads us to conclude that the impugned judgment of the High Court is erroneous and warrants to be set aside. We, accordingly, allow these appeals, set aside the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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