Purposive construction of amnesty scheme protects prior tax payment and invalidates coercive recovery

An amnesty scheme designed to waive interest and penalty on payment of tax must be construed purposively and beneficially. Where the dealer had already paid tax and interest before the assessment order, that prior payment did not defeat eligibility for amnesty or justify denial of consequential relief. The High Court treated the authority's demand for further payment under Clause 4.5 as a misreading of the scheme, found the rejection of the amnesty application unsustainable, and quashed the rejection letter and bank account attachment. It also directed refund of the amount recovered with statutory interest.

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Issues: Whether the petitioner was entitled to the benefit of the Amnesty Scheme despite payment of tax and interest before the assessment order, and whether the rejection of the application, the attachment of bank accounts, and the consequential recovery could be sustained.

Analysis: The petitioner had already paid the tax and interest before the assessment order, yet the assessment proceedings involved tax, interest and penalty and the appeal had been withdrawn to avail the Amnesty Scheme. The Scheme was held to be intended to grant waiver of interest and penalty on payment of tax, and its clauses could not be read in a manner that would deny relief to a dealer who had already discharged the tax liability before the scheme was invoked. The demand for further payment under Clause 4.5, as applied by the authority, was found to be a misreading of the Scheme. On that construction, the rejection of the amnesty application was unsustainable, and the alternative prayer for restoration of the second appeal did not survive.

Conclusion: The petitioner was held entitled to the benefit of the Amnesty Scheme. The rejection letter and the attachment order were quashed, and refund of the amount recovered with statutory interest was directed.

Final Conclusion: The decision grants full relief to the petitioner by enforcing the amnesty benefit, nullifying coercive recovery, and directing restitution with interest.

Ratio Decidendi: An amnesty scheme intended to waive interest and penalty upon payment of tax must be construed purposively and beneficially, so that prior payment of tax and interest does not defeat eligibility for the scheme or justify denial of consequential relief.

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