Amnesty scheme relief cannot be denied for a curable interest shortfall without prior notice to the assessee.

A beneficial amnesty scheme should not be denied on a rigid literal reading where the assessee has substantially complied and the default is only a curable shortfall in interest. The Gujarat HC held that rejection for non-payment of a small interest component, without prior notice to make good the deficiency, was unjustified when the principal had been paid within the extended time and the scheme's object was to recover old dues and reduce litigation. The impugned rejection was quashed, the assessee was held entitled to the scheme benefit, and consequential refund with interest was directed.

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Issues: Whether rejection of the petitioner's application under the Amnesty Scheme for non-payment of a small amount of interest, without prior intimation to make good the shortfall, was valid.

Analysis: The petitioner had substantially complied with the instalment schedule under the benevolent scheme and had paid the principal amount within the extended time. The only default was belated payment of two instalments, which attracted a small interest component. The rejection was founded on a literal reading of the scheme condition, without first informing the petitioner of the outstanding interest. In a beneficial scheme intended to recover old dues and reduce litigation, such a rigid approach was held to be unjustified when the shortfall was capable of being cured and the last date for payment had already been extended.

Conclusion: The rejection of the application was unsustainable and was set aside. The petitioner was entitled to the benefit of the Amnesty Scheme.

Final Conclusion: The writ petition succeeded, the impugned rejection was quashed, and consequential refund with interest was directed.

Ratio Decidendi: A beneficial amnesty scheme cannot be rejected on a rigid literal interpretation for a curable shortfall in interest without prior notice to the assessee, where the assessee has otherwise substantially complied with the scheme.

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