Prior deposits under a tax remission scheme must be adjusted toward compliance, preventing duplicate payment and preserving waiver benefits.

Under the Kara Samadhan Scheme, earlier deposits made during the pendency of appeal had to be taken into account when testing compliance with the prescribed payment condition. Condition No. 7 required prior tax, penalty or interest paid in excess of the specified amounts to be adjusted toward the Scheme requirement, so such payments could not be ignored or treated as duplicative. On that reading, an assessee who had already made higher deposits was entitled to waiver of the balance penalty and interest. The endorsement rejecting Scheme benefit was therefore unsustainable, and the writ petition was allowed.

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Issues: Whether, under the Kara Samadhan Scheme, amounts already deposited during pendency of the appeal could be treated as compliance with the stipulated deposit condition so as to entitle the assessee to waiver of the balance penalty and interest.

Analysis: The Scheme required payment of the specified percentage of penalty and interest, but condition No. 7 expressly provided that where an assessee had already paid tax, penalty, or interest in excess of the amounts specified, the Scheme would stand modified to that extent and apply to the balance amounts. Reading the conditions together, earlier deposits could not be ignored or treated as irrelevant. The effect of condition No. 7 was to prevent duplication of payment and to ensure that amounts already paid were adjusted towards the prescribed requirement. A contrary reading would penalise an assessee who had made higher earlier payments and would defeat the object of the Scheme.

Conclusion: The earlier deposit satisfied the Scheme requirement to the extent of the prescribed payment, and the assessee was entitled to the benefit of waiver for the balance.

Final Conclusion: The endorsement denying the benefit under the Scheme was unsustainable, and the writ petition succeeded with a direction to treat the earlier deposit as compliance under condition No. 7.

Ratio Decidendi: A beneficial tax remission scheme must be read so that prior payments in excess of the prescribed minimum are adjusted towards compliance, and an assessee cannot be required to make an additional payment merely because the earlier deposit was made before the scheme came into force.

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