2002 (7) TMI 76 - HC - Income Tax

Goldsmith wins right to declare under Kar Vivad Samadhan Scheme, 1998

The court ruled in favor of the petitioner, a goldsmith, allowing them to proceed with the declaration under the Kar Vivad Samadhan Scheme, 1998. The ... Admissibility of declaration under Kar Vivad Samadhan Scheme - meaning of 'admitted and pending' writ petition - obligation of designated authority under section 90(1) and (2) - exclusion under clause (i)(c) of section 95 - prohibition on coercive recovery during declaration proceedingsAdmissibility of declaration under Kar Vivad Samadhan Scheme - exclusion under clause (i)(c) of section 95 - Declaration filed by the petitioner under the Kar Vivad Samadhan Scheme is not barred by pendency of the writ petition and is admissible. - HELD THAT: - The Court examined section 95 which excludes cases 'to a case where no appeal or reference or writ petition is admitted and pending' and held that the phrase 'admitted and pending' is significant. A writ petition is 'admitted' when the court, applying judicial mind, finds prima facie arguable questions of law warranting admission. The Division Bench's order admitting the writ petition recorded that arguable questions of law arose and fixed urgent dates, thereby constituting an admitted and pending petition on the date the declarant filed the declaration. Consequently, the statutory exclusion in clause (i)(c) of section 95 did not operate to bar the petitioner from obtaining the benefit of the Scheme where the writ petition was in fact admitted and pending when the declaration was filed before the last date.Declaration under the Scheme is admissible despite the pending writ petition because the writ was admitted and pending on the filing date.Obligation of designated authority under section 90(1) and (2) - prohibition on coercive recovery during declaration proceedings - Designated authority is obliged to determine the amount payable and grant the prescribed certificate under section 90(1) and (2), and must refrain from coercive recovery during such proceedings. - HELD THAT: - Section 90 mandates that within sixty days of receipt of a declaration the designated authority shall determine the amount payable and grant a certificate setting out particulars of tax arrear and the sum payable towards full and final settlement. Given the court's finding that the writ petition was admitted and pending when the declaration was filed and that the declaration was timely, the Court directed the designated authority to proceed in accordance with law on the petitioner's declaration. The Court further directed that during the pendency of the matter before the designated authority no coercive process for recovery shall be taken, thereby preserving the declarant's position while the statutory process is completed.The designated authority must decide the declaration within the statutory framework and refrain from coercive recovery while proceedings on the declaration are pending.Admissibility of declaration under Kar Vivad Samadhan Scheme - Writ petition permitted to be withdrawn subject to reservation of rights, in view of direction to proceed with the declaration. - HELD THAT: - Having directed the designated authority to proceed with the declaration, the Court allowed the petitioner to withdraw the writ petition while expressly reserving the parties' rights and contentions for appropriate stages and keeping open the petitioner's right to approach the Court if necessary. The withdrawal was permitted on the basis that the statutory declaration process will be carried out without prejudice to either party's contentions.Permission granted to withdraw the writ petition, without prejudice to parties' rights, following direction to proceed with the declaration.Final Conclusion: The Court held that the petitioner's declaration under the Kar Vivad Samadhan Scheme for AYs 1985-86 and 1989-90 was admissible because the writ petition was admitted and pending when the declaration was filed; it directed the designated authority to determine the payable amount and grant the certificate in accordance with section 90 within the prescribed period, prohibited coercive recovery during those proceedings, and permitted withdrawal of the writ petition subject to reservation of rights. Issues:1. Entitlement to declaration under Kar Vivad Samadhan Scheme.2. Interpretation of provisions under the Scheme of 1998.3. Impact of pending writ petition on the Scheme application.Issue 1: Entitlement to declaration under Kar Vivad Samadhan SchemeThe case involved a petitioner, a goldsmith, who faced tax assessment disputes and sought to settle under the Kar Vivad Samadhan Scheme, 1998. The petitioner filed a declaration under the Scheme for assessment years 1985-86 and 1989-90 before the last filing date of January 31, 1999. The core question was whether the applicant was entitled to the declaration under the Scheme as per the provisions of section 90(1) and (2) of the Scheme of 1998. The designated authority was obligated to proceed with the declaration proceedings as the petitioner fulfilled all requisite conditions for the scheme's application.Issue 2: Interpretation of provisions under the Scheme of 1998The court analyzed various provisions of the Kar Vivad Samadhan Scheme, such as section 87 defining key terms like 'declarant' and 'designated authority,' section 88 for settlement of tax payable, and section 90 detailing the time and manner of payment of tax arrear. Section 95 was crucial, stating that the Scheme would not apply to cases where no appeal, reference, writ petition, or revision application was admitted or pending before appellate authorities or courts on the date of filing the declaration. The court emphasized the significance of the expression 'writ petition is admitted and pending' in determining the Scheme's applicability.Issue 3: Impact of pending writ petition on the Scheme applicationThe court examined the impact of the pending writ petition on the petitioner's eligibility under the Scheme. The Division Bench admitted the writ petition under articles 226 and 227 of the Constitution of India, acknowledging arguable legal questions and the urgency of the matter due to the Scheme's impending deadline. Despite challenges raised by the Revenue, the court upheld the admission of the writ petition and directed the designated authority to proceed with the declaration proceedings as per the Scheme's provisions. The petitioner was granted permission to withdraw the writ petition, with the designated authority instructed to decide on the declaration within three weeks, ensuring no coercive recovery actions during the process.This detailed analysis of the judgment highlights the court's interpretation of the Kar Vivad Samadhan Scheme's provisions, the petitioner's entitlement to declaration under the Scheme, and the impact of the pending writ petition on the Scheme application process.