Amnesty scheme coverage for penalty arrears requires authorities to process applications when scheme conditions and partial payment are satisfied.

A statutory amnesty scheme covering arrears of penalty and interest for the relevant period was held applicable to the petitioner's VAT penalty default, including the March 2015 period. The court noted that the scheme required payment of only 10% of the arrears, with the balance liable to be waived, so the authority could not refuse to process the application once the scheme conditions were met. The petitioner's request was therefore required to be accepted and processed under the Kara-samadhana Scheme of 2017 on payment of 10% of the penalty.

---

---

Issues: Whether the petitioner was entitled to the benefit of the Kara-samadhana Scheme of 2017 in respect of the penalty levied under the Karnataka Value Added Tax Act, and whether the authority was bound to accept and process the application under the Scheme on payment of 10% of the penalty.

Analysis: Clause 1.2 of the Scheme covered arrears of penalty and interest arising under the KST and CST laws for the relevant period, and the period in question included the default relating to March 2015. Clause 2.3 required payment of only 10% of the arrears, with the balance liable to be waived. The refusal to extend the Scheme benefit was therefore unjustified, and the petitioner's application was required to be accepted and processed in accordance with the Scheme.

Conclusion: The issue was decided in favour of the assessee, and the respondent was directed to accept the application under the Scheme, subject to payment of 10% of the penalty.

Ratio Decidendi: Where a statutory amnesty or settlement scheme expressly covers arrears of penalty and interest for the relevant period, the authority must extend the scheme benefit and process the application in accordance with its terms.

---