Settlement scheme withdrawal of pending appeal depends on full payment and Form 3, not merely Form 2B.

Under the settlement scheme in Section 90 of the Finance (No. 2) Act, 1988, withdrawal of a pending appeal arises only after the statutory sequence is completed: declaration, determination of the amount payable, payment of the determined sum, and issuance of Form 3 evidencing full and final settlement. Mere issuance of Form 2B does not by itself terminate the appeal. The appeal therefore continued until compliance with the settlement requirements, and the matter was remanded for de novo consideration with consequential stay relief.

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Issues: Whether an appeal pending against the departmental order ceased to exist on issuance of Form 2B under the settlement scheme, or whether withdrawal of the appeal could arise only after issuance of Form 3 upon full and final settlement of the tax arrears.

Analysis: The operative scheme under Section 90 of the Finance (No. 2) Act, 1988 contemplates a sequence of steps: declaration, determination of the amount payable, payment of the sum determined, and thereafter issuance of the certificate in Form 3 evidencing full and final settlement. The deeming provision for withdrawal of a pending appeal is triggered only when the stage under Section 90(2) is reached and Form 3 is issued. Mere issuance of Form 2B, without completion of the statutory settlement by payment and certification, does not by itself terminate the appeal.

Conclusion: The appeal did not stand withdrawn on issuance of Form 2B and remained alive until compliance with the statutory requirements for issuance of Form 3. The matter was therefore remanded for de novo consideration, with consequential stay relief granted.

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