Kar Vivad Samadhan Scheme relief for co-noticees depends on same-matter settlement and full tax arrears discharge.

Relief under the Kar Vivad Samadhan Scheme extends to a co-noticee only where the principal noticee's settlement covers the same matter and the relevant tax arrears are fully settled. Where the co-noticee's liability arises from distinct conduct and the principal noticee has made only a partial settlement, the co-noticee cannot claim immunity on that basis. The document also notes that a penalty was upheld where the petitioner was found to have fabricated bogus documents, acted without authority, and facilitated duty-free clearance through misuse of the advance licence; the penalty was held neither excessive nor disproportionate.

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Issues: (i) Whether the benefit of the Kar Vivad Samadhan Scheme granted to the principal noticee could extend to the petitioner, a co-noticee, when the liability against them arose from distinct causes of action and there was only partial settlement by the principal noticee; (ii) Whether the penalty of Rs. 15,00,000 imposed on the petitioner was excessive or disproportionate.

Issue (i): Whether the benefit of the Kar Vivad Samadhan Scheme granted to the principal noticee could extend to the petitioner, a co-noticee, when the liability against them arose from distinct causes of action and there was only partial settlement by the principal noticee.

Analysis: The adjudication showed that the principal noticee was proceeded against for illegal sale of duty-free glycerine and S.L.S., while the petitioner was penalised for independently fabricating bogus high-seas sale documents to clear peppermint oil and clove bud oil without duty. The settlement under the scheme did not cover the clove bud oil liability, and the principle that relief to a principal noticee extends to co-noticees applies only where the demand arises from the same matter and a complete settlement is made in respect of the relevant tax arrears. Since the liabilities were separate and the settlement was only partial, the petitioner could not claim immunity on the basis of the principal noticee's declaration.

Conclusion: The benefit of the Kar Vivad Samadhan Scheme was not available to the petitioner.

Issue (ii): Whether the penalty of Rs. 15,00,000 imposed on the petitioner was excessive or disproportionate.

Analysis: The petitioner was found to have deliberately created fictitious and bogus documents, acted without authority on behalf of other entities, and facilitated duty-free clearance of goods by misuse of the advance licence. His conduct was treated as a serious and independent contravention, distinct from the principal noticee's liability. In that context, the higher penalty was held to be justified and not liable to interference in writ jurisdiction.

Conclusion: The penalty was neither excessive nor disproportionate.

Final Conclusion: The writ petition failed, and the impugned penalty order was sustained.

Ratio Decidendi: Relief under the Kar Vivad Samadhan Scheme extends to a co-noticee only where the settlement by the principal noticee covers the same matter and the relevant tax arrears are fully settled; where liabilities arise from distinct causes of action or only partial settlement is made, immunity cannot be claimed by the co-noticee.

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