Proprietary concern penalty settlement under Kar Vivad Samadhan Scheme barred a separate penalty on the sole proprietor.

A sole proprietor and a proprietary concern are treated as one and the same juristic person, so a separate penalty on the proprietor could not survive after the penalty on the proprietary concern was settled under the Kar Vivad Samadhan Scheme. The Tribunal noted that the scheme did not permit splitting the proprietor from the proprietary concern for the purpose of sustaining a second penalty. The separate penalty on the proprietor was therefore set aside.

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Issues: Whether a separate penalty could be sustained on the sole proprietor of a proprietary concern after the penalty on the proprietary firm had been settled under the Kar Vivad Samadhan Scheme.

Analysis: The Tribunal held that a sole proprietor and the proprietary firm are not distinct entities in law and constitute one and the same juristic person. Once the penalty levied on the proprietary concern stood settled under the Kar Vivad Samadhan Scheme, the separate penalty imposed on the proprietor for the same matter could not survive. The Tribunal also noted that the scheme did not permit separation of the proprietor from the proprietary concern for the purpose of sustaining a second penalty.

Conclusion: The separate penalty on the sole proprietor was not sustainable and was set aside.

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