Karasamadhana Scheme waiver applies to reassessment penalty when general scheme conditions for completed reassessments are satisfied.

The Karasamadhana Scheme, 2021 distinguishes between general arrears of penalty and interest arising from completed assessments or reassessments, and specific penalties listed in a separate clause. A reassessment penalty imposed under Section 70(2) read with Section 39 of the KVAT Act, where the reassessment was completed before the scheme cut-off date, is covered by the general waiver provision in Clause 2 rather than the special penalty clause. The absence of tax arrears did not bar relief, and the scheme supported 100% waiver of the penalty where only qualifying penalty and interest arrears existed.

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Issues: Whether the petitioner's reassessment penalty under the Karnataka Value Added Tax Act, 2003 fell within the Karasamadhana Scheme, 2021 and entitled it to 100% waiver of penalty.

Analysis: The Scheme contained separate and independent clauses governing different categories of tax liabilities and penalties. Clause 2 covered arrears of penalty and interest arising from assessments, reassessments, or rectification orders under the KVAT Act completed on or before 31.07.2021. Clause 3 dealt only with specified penalties under Sections 72(1)(a), 72(1)(b), 74(4), and 72(3-B) of the KVAT Act. The petitioner's penalty was imposed under Section 70(2) read with Section 39 of the KVAT Act pursuant to a reassessment completed on 28.04.2021, and it was not a penalty of the kind specified in Clause 3. The petitioner also had no arrears of tax, so the conditions in Clause 5.1 did not defeat the claim, and Clause 5.2 supported waiver where only penalty and interest arrears existed in respect of completed reassessments within the prescribed period.

Conclusion: The penalty fell within Clause 2 of the Scheme and the petitioner was entitled to 100% waiver of the penalty.

Final Conclusion: The rejection of the waiver application was unsustainable, and the petitioner obtained complete relief under the Scheme in respect of the reassessment penalty.

Ratio Decidendi: Where a remission scheme separately covers completed reassessments up to a cut-off date, a reassessment penalty not confined to a special penalty clause remains eligible for waiver under the general waiver provision if the scheme conditions are satisfied.

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