Cheque payment within statutory time limit counted as timely compliance under the Kar Vivad Samadhan Scheme.

Payment of the settlement amount under the Kar Vivad Samadhan Scheme, 1998 by cheque within the prescribed 30-day period satisfied the statutory time limit where the cheque was later honoured. A cheque, unless dishonoured, operates as payment from the date of delivery rather than the date of encashment. On that basis, the statutory payment obligation under the scheme was treated as complied with in time, and entitlement to the scheme benefit was upheld.

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Issues: Whether payment of the settlement amount under the Kar Vivad Samadhan Scheme, 1998, by cheque delivered within the prescribed period satisfied the statutory time limit for entitlement to the scheme benefit.

Analysis: The declaration under section 88 of the Finance (No.2) Act, 1998 was accepted and a certificate of intimation under section 90(1) of the Finance (No.2) Act, 1998 required payment within 30 days. The amount was tendered by cheque within that period, and the cheque was honoured in the ordinary course. Payment by cheque, unless dishonoured, operates as payment from the date of delivery of the cheque and not from the date of encashment. On that basis, the statutory obligation was satisfied within time.

Conclusion: The assessee was entitled to the benefit of the Kar Vivad Samadhan Scheme, 1998, and the denial of that benefit was unsustainable.

Ratio Decidendi: Where a statute permits payment by cheque and the cheque is delivered within the prescribed time and is subsequently honoured, payment is deemed to be made on the date of delivery of the cheque for determining compliance with the time limit.

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