Strict compliance with fiscal amnesty terms defeats continued benefit after cheque default; statutory appropriation remains unassailable.

A fiscal amnesty scheme under the Kerala General Sales Tax Act required strict compliance, and an assessee who failed to maintain sufficient funds to honour cheques issued under the scheme could not insist on continued benefits or demand notice before the benefit ended. The court treated the scheme as a settlement of arrears as a whole, not a piecemeal arrangement for individual assessment years, and held that the assessee's own default brought the amnesty to an end. It also held that appropriation of amounts collected under the statutory provision governing allocation of receipts could not be challenged merely because the assessee preferred a different adjustment.

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Issues: (i) Whether the assessee, having defaulted in maintaining sufficient funds to honour the cheques issued under the amnesty scheme, could insist on continuance of the benefit and claim that revocation required notice under the scheme; (ii) Whether appropriation of the amounts realised under Section 55C could be questioned in the facts of the case.

Issue (i): Whether the assessee, having defaulted in maintaining sufficient funds to honour the cheques issued under the amnesty scheme, could insist on continuance of the benefit and claim that revocation required notice under the scheme.

Analysis: Section 23B of the Kerala General Sales Tax Act, 1963 was treated as a scheme for settlement of arrears due prior to 31 March 2005, not for piecemeal settlement of individual assessment years. The Court held that the assessee had applied for amnesty for all relevant years together and was bound to ensure that sufficient funds were available to honour all cheques issued before the last date fixed under the scheme. The scheme conditions were held to require strict compliance. On that basis, the Court held that the default of the assessee itself brought the benefit to an end, and no further continuance under the scheme could be claimed. The notice contemplated by the scheme was held relevant only where the Revenue resorted to revocation for the defaults covered by the scheme, not where the assessee itself failed to comply with the payment obligation by the stipulated date.

Conclusion: The assessee had no enforceable right to continue under the amnesty scheme after its own default, and no notice-based challenge to the consequence of that default was sustainable.

Issue (ii): Whether appropriation of the amounts realised under Section 55C could be questioned in the facts of the case.

Analysis: Section 55C of the Kerala General Sales Tax Act, 1963 was treated as a statutory mandate governing appropriation of the amounts collected. The Court held that such appropriation was not open to challenge merely because the assessee sought a different allocation of the amounts towards particular assessment years. Since the appropriation followed the statutory command, it could not be assailed on equitable or factual considerations arising from the cheque dishonour situation.

Conclusion: The appropriation under Section 55C could not be challenged.

Final Conclusion: The writ petition failed because the assessee's own default defeated its claim to amnesty benefits, and the statutory appropriation of collected amounts remained valid.

Ratio Decidendi: A fiscal amnesty scheme must be strictly complied with, and an assessee who defaults in the prescribed payment conditions loses the scheme benefit; statutory appropriation made under the governing provision cannot be impeached on equitable grounds.

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