Mandatory payment deadline under a voluntary disclosure scheme makes late-paid amounts refundable when the declaration lapses on default.

Under the Voluntary Disclosure Scheme, 1997, payment of tax within three months was a mandatory condition precedent, and default caused the declaration to be treated as never made. The court applied the binding Supreme Court position that the statutory time-limit could not be relaxed because the Scheme itself provided the consequence for non-payment within time. Amounts paid within the prescribed period could be retained against tax liability, but sums paid after expiry of the period were not validly received under the Scheme and had to be refunded.

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Issues: Whether failure to pay the tax within three months under the Voluntary Disclosure Scheme, 1997 rendered the declaration void, and whether the amounts paid beyond that period were refundable.

Analysis: The Scheme permitted filing of the declaration first and payment of tax within three months, but expressly provided that if the declarant failed to pay within that period, the declaration would be deemed never to have been made. The Court followed the binding Supreme Court ruling that there was no basis to relax this time-limit, and that the consequences of non-compliance were specifically built into the Scheme. Since the payments made after the prescribed period could not be accepted under the Scheme, only the amounts paid within time could be retained against tax liability, and the balance had to be returned.

Conclusion: The challenge to the Scheme's operation failed, and the assessee was entitled only to refund of the amounts paid beyond the prescribed period.

Final Conclusion: The petition succeeded only to the extent of directing refund of the late-paid amount, while the statutory time-limit under the Scheme was treated as mandatory.

Ratio Decidendi: Where a fiscal amnesty scheme expressly makes timely payment a condition precedent and states the consequence of non-payment within the stipulated period, the declaration becomes ineffective on default and amounts paid after the deadline are not retainable under the scheme.

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