Statutory settlement schemes cannot include liabilities outside their express scope; unauthorized sales tax inclusion was invalid.

A statutory settlement authority under the Kar Vivad Samadhan Scheme, 1998 cannot include contingent sales tax liability outside the express scope of the Finance Act, 1998 scheme while computing tax arrears. The scheme was confined to specified indirect tax enactments and to tax arrears comprising duty, cess, interest, fine or penalty under those enactments; sales tax dues payable to a State Government were not covered. An order under section 90(3) is conclusive only for matters lawfully within the scheme and does not cure a demand made without jurisdiction. The certificate could therefore be amended, and the incorrect inclusion was held invalid and unsustainable.

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Issues: Whether the designated authority under the Kar Vivad Samadhan Scheme, 1998 could include contingent sales tax liability, not covered by the Scheme, while computing tax arrears for settlement under the Finance Act, 1998.

Analysis: The Scheme under Chapter IV of the Finance Act, 1998 permitted settlement only of tax arrears arising under the specified indirect tax enactments. The definition of "indirect tax enactment" and the scheme provisions governing "tax arrear" confined the settlement to duties, cesses, interest, fine or penalty under the identified enactments. Sales tax dues payable to the State Government were outside the Scheme. The designated authority had no jurisdiction to enlarge the statutory field of settlement by adding contingent sales tax liability to the arrears declared by the assessee. Section 90(3) made an order conclusive only as to matters lawfully covered by the Scheme, and could not validate a claim made without jurisdiction or bar judicial review of an erroneous demand. The power to amend the certificate reinforced that an incorrect inclusion could be corrected in the same proceedings.

Conclusion: The inclusion of contingent sales tax liability in the settlement amount was invalid and unsustainable; the assessee succeeded on this issue.

Final Conclusion: The impugned certificate and demand were set aside to the extent they included sales tax liability, and the designated authority was directed to recalculate the amount in accordance with the Scheme and grant consequential refund.

Ratio Decidendi: A settlement authority under a statutory amnesty scheme cannot include liabilities outside the express scope of the scheme, and an order purportedly determining the settlement amount is not conclusive where the additional demand is without jurisdiction.

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