Amnesty scheme relief cannot be denied on a hyper-technical demand notice reading where tax was already paid before assessment.

A beneficial amnesty scheme was construed to extend remission of interest and penalty where the assessee had already discharged the tax component before assessment and the dispute concerned a composite liability of tax, interest and penalty. The demand in the intimation letter could not be treated as a separate bar to relief when, on a conjoint reading of the scheme clauses, it represented only the penal component after tax had been paid. A hyper-technical reading inconsistent with the scheme's object of resolving old disputes was rejected, and the rejection of the application and consequential recovery were held unsustainable; the benefit was to be granted and the recovered amount refunded with statutory interest.

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Issues: Whether the assessee, having already paid tax and interest before the assessment and having challenged the composite assessment order, was entitled to the benefit of the amnesty scheme without further payment of the amount demanded in the intimation letter, and whether rejection of the scheme application and consequential recovery were sustainable.

Analysis: The scheme was intended to grant remission of interest and penalty on fulfilment of its conditions and to resolve old pending disputes. The assessee had already paid the tax and interest, while the assessment order and the pending appeal covered tax, interest, and penalty together. On a conjoint reading of the scheme clauses, the benefit could not be denied merely because the amount demanded in the intimation letter was not paid, when the demand represented only the penal component after tax had already been discharged. The respondent authority's insistence on payment under the wrong construction of the scheme was contrary to its object and to the prior judicial understanding of similar scheme provisions.

Conclusion: The assessee was entitled to the benefit of the amnesty scheme, and the rejection of the application and consequential coercive recovery were unsustainable.

Final Conclusion: The impugned rejection and recovery action were set aside, the amnesty benefit was directed to be granted, and the recovered amount was ordered to be refunded with statutory interest.

Ratio Decidendi: A beneficial amnesty scheme must be construed to extend its remission of interest and penalty to an assessee who had already discharged the tax component before assessment, where the disputed proceedings covered the composite liability and the scheme does not permit denial on a hyper-technical reading of the demand notice.

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